Few in the world of finance are more respected than JPMorgan Chase(NYSE: JPM) CEO Jamie Dimon. He has led the company for about two decades, first guiding it through the Great Recession virtually unscathed and then building it into the largest U.S. bank by assets. JPMorgan Chase now generates some of the highest returns among its peers, earning it a premium valuation.
For all these reasons, the market tends to listen when Dimon speaks. In his annual letter to shareholders this year, Dimon issued a warning to Wall Street. The famous banker exposed three major risks and they could not be clearer.
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Not surprisingly, given the current climate, Dimon cited geopolitics as one of the biggest risks. The big issues are the Iran war and the broader conflict in the Middle East, the ongoing war between Russia and Ukraine, and rising tensions, particularly with China.
In particular, the Iran war has caused oil prices to rise. Although Dimon hopes that all existing conflicts can be resolved, he points out that “the enemy also has the right to vote.” Dimon added that it’s more than just energy. Iran’s closure of the Strait of Hormuz is also affecting fertilizer and helium prices, causing major disruptions to food, shipbuilding and agriculture in many countries.
Dimon also pointed to current problems with tariffs and trade negotiations, especially given already inflated asset prices. President Donald Trump’s announcement of major tariffs in April 2025, known as “Liberation Day,” triggered a major stock sell-off. The Iran war triggered this year’s sell-offs. Without these two issues, it is interesting to think about where the market could be.
Investors must understand that all of these current problems will have long-term effects. How trade negotiations are ultimately resolved could have major ramifications for economic growth, while developments in the Strait of Hormuz will also affect global supply chains in the long term.
While issues surrounding private credit, which involves various types of non-bank lending, are widely discussed in the media, Dimon has been warning about this trend for years. Private credit, which operates outside the banking system, has been able to steal market share from banks, which have been burdened by increased regulation since the Great Recession.
In his letter, Dimon points to several statistics, one of which is that global private credit assets under management (AUM) have increased from $300 billion in 2010 to $1.8 trillion in 2025. To put this in context, Dimon points out that private credit is now larger than the US high-yield bond market and the bank syndicated leveraged loan market.
Now, given that the investment-grade bond market and the residential mortgage market are worth $13 trillion each, Dimon does not view private credit as a systemic risk, an assessment he is not alone in making. However, it does say that as long as there is a credit cycle, something that hasn’t happened since the Great Recession, losses on all types of leveraged loans “will be larger than expected, relative to the environment.”
Dimon believes underwriting has weakened due to aggressive assumptions, weaker covenants and a greater number of borrowers paying principal instead of interest, among other concerns. He also worries about loan brands, a lack of transparency and the possibility that more borrowers will eventually be forced to refinance their loans at higher rates.
Dimon talked a lot about AI in his letter, and it wasn’t all bad. He talked about how AI will affect almost all functions of the bank and that management plans to implement AI in all applications and processes of the company. JPMorgan Chase plans to spend nearly $20 billion on technology this year. Dimon also hopes that AI will significantly improve productivity and help the world solve some of its most challenging problems.
However, the overall effects of such a major technological change are still largely unknown. The risks are also significant and include deepfakes, disinformation, cybersecurity issues, and much more. Dimon also did not sugarcoat the potential effect of AI on the labor market: “There is a possibility that the implementation of AI will move faster than the adaptation of the workforce to the creation of new jobs. In previous technological transformations, the workforce had time to adapt and retrain.”
The good news is that Dimon doesn’t see AI as an existential threat. It can be avoided if leaders and governments prepare wisely. Some suggestions include incentivizing retraining, providing income assistance, retraining, early retirement, and relocation for people negatively affected by AI.
While Dimon raises many positive points, investors should not expect this transition to be smooth. While stressful at times, thinking about what can go wrong can help someone become a better investor in the long run. This doesn’t mean that people have to significantly change their portfolios, especially if they are long-term investors, but it is always a good idea to question one’s own theses.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool holds and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.
JPMorgan Chase CEO Jamie Dimon just issued a warning to Wall Street. The famous banker sees three big risks and they couldn’t be clearer. Originally published by The Motley Fool.
