Every year after the closing of the first quarter (Q1), stock exchange analysts and investors expect to read with particular interest the letter that Jamie Dimon sends to JPMorgan Chase shareholders. The strongest banker of the largest bank on the planet who never chews his words, once again illuminates shadowy aspects of the world economy and knocks the alarm bells in front of the rested mood of investors.
Jamie Dimon, who closed this year for twenty years at the steering wheel of JPMorgan, was also on the list of Fed presidential candidates who had surrendered to the White House in early 2025. However, in the process, his name had been deleted by the President of the United States himself, who had accused Dimon as a left overrated fan of globalisation, as a Republican only by name, as an executive of the establishment of the Democratic Party, the radical Left, but also of the deep state.
His annual letter to JPMorgan shareholders is not a mere corporate announcement. Many like it to a mirror of the global economy, as well as a description of investment and business risks, and potential. And on the occasion of the 250-year anniversary of the establishment of the US, Dimon, invited American citizens to redefine the fundamental values that made America a superpower. Freedom and opportunity.
Geopolitical competition
The challenges facing the US and the West are important. At the top of the list of challenges and risks lie the current war in Iran, the war in Ukraine raging, the effervescent by the wider hostilities in the Middle East, the escalation of terrorism and the increasing geopolitical tensions, particularly with China, which remains the great rival of the US. Wars are the sources of uncertainty and their outcome according to Dimon can determine the global economic order for the next decades. History has taught us that conflicts are not just a human drama. But they become catalysts that disrupt supply chains, launch commodity prices, reshape existing alliances, creating new balance.
Trade wars and economic relations
With the American president having made the tariffs, a trademark of his second term, dozens of US trading partners and their competitors are under pressure. Trade battles are not over and almost all countries are analysing how and with which partners, they should create secure trade agreements and long-term partnerships. According to Dimon, national security and resilience may be priorities for the US, but the long-term outcome remains cloudy and uncertain. Like all serious analysts, Dimon is a pragmatist, resulting in neither overstretching nor rejecting customs duties. In fact, it calls for strategic long-term thinking and not ideological blindness, which currently prevails in the economic planning of the White House.
Artificial Intelligence is not a bubble
Dimon's been repeating what he's been saying for years. That the rate of adoption of Artificial Intelligence doesn't look like anything before. Artificial Intelligence is not a bubble. But as he argues, we cannot predict the final winners and losers now, both in the area of necessary and necessary infrastructure (chips, date centers, energy etc.), and in the area of applications such as Gemini (Google), ChatGPT (OpenI), Claude (Anthropic), Grok (xAI), Perplexity AI, Microsoft Copilot and others. JPMorgan, in itself, is a pioneer in AI, as it uses agent AI at all levels of operations and decisions of the bank, reshaping the workforce, redesigning structures and offering better service to its customers. However, the efficiency of capex costs will show the direction of the industry.
Fear of market deregulation
The euphoria period from the possibility of further deregulation of the banking and stock market in the US, which was a clear election promise by Donald Trump, closed without tangible results. Similarly, the new Basel III restrictive regulatory framework, the new high banking capital requirements and liquidity requirements, the strict stress tests of the Fed, as well as the new rules on deposit insurance, the new special contribution and the stricter rules on mergers imposed by the FDIC concern Dimon. The new rules will for example force JPMorgan to hold 50% more funds as guarantees, for the same amount of consumer and business loans as other smaller banks.
According to Dimon, «the underregulation doesn't protect, but it drowns». It prevents credit expansion, increases lending costs for households and businesses and ultimately hits growth itself. And there are not few bankers who estimate that Brussels' bureaucracy and strict regulatory and regulatory framework has already moved to Washington. However, it is quite understandable that regulatory authorities are planning their policies in order to prevent the emergence of a new crisis. Like this mortgage housing loan, which wiped out an entire bank, Lehman Brothers, and plunged into a recession in the global economy.
The turmoil in private credit funds
It could not be missing from the letter to JPMorgan's shareholders «invisible» an elephant in the US markets, i.e. private credit funds. The wave of massive acquisitions of stakes on the part of investors is not due to the crisis from the war in Iran, but to the fear of the company's defaulting obligations to private lenders. The problem is lack of transparency and non-recording of real assessments.
The actual damage recorded is already higher than those originally assessed. So the regulatory authorities will require stricter ratings and valuations, which will lead to additional capital requirements, in order to restore the sense of security in this growing market, to halt the wave of massive private investors leaving private investors from private credit funds.
Target for S&P 500 and interest rates
The analyses accompanying Dimon's letter to JPMorgan shareholders follow three scenarios for S&P 500. The key scenario is 7,200 units, 8,000 units optimistic and pessimistic at 6,000 points. For interest rates, while the market hoped for interest rates reductions within 2026, JPMorgan economists, led by Michael Feroli, appear vertical, predicting zero interest rate reductions for the entire 2026.
