JPMorgan Chase just reported strong first-quarter results. Its CEO used the earnings call to warn investors not to get comfortable.
On JPMorgan’s first-quarter 2026 earnings conference call on April 14, CEO Jamie Dimon declined to predict whether the United States was headed toward a recession. But he didn’t hold back on what will happen when the next credit cycle finally arrives. “When there is a credit cycle, the losses will be worse than people expect,” he said, according to American Banker.
Dimon was careful to separate two things: the immediate health of JPMorgan’s book and the broader systemic risk he believes is brewing.
In the immediate picture, he said the bank is not seeing major credit problems. JPMorgan has about $50 billion of exposure to the $1.7 trillion private lending industry.
Its total provision for credit losses shrank in the first quarter, and the bank only suffered one write-off on its nonbank financial institution loan portfolio, which totaled about $160 billion last quarter, according to American Banker.
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Regarding systemic risk, it was more measured. “I don’t think (private credit risk is) systemic. It can hardly be systemic at that size, relative to anything else. But when recessions happen, values ​​go down, and people refinance at higher rates, it will stress and strain the system,” he said, according to American Banker.
The distinction matters. Dimon does not foresee an imminent collapse. He is saying that when conditions change, the pain will be worse than most people currently assume.
Dimon pointed out two structural problems in his annual letter to shareholders, published on April 6.
First, credit standards have been weakening across the board. When standards drop during good times, losses that emerge in a recession tend to surprise investors who assumed underwriting remained disciplined, according to AOL citing the letter to shareholders.
Secondly, private credit lacks transparency. Because the market does not set prices daily like government debt, when stress hits, investors will sell based on predictions rather than actual losses. According to AOL, that type of behavior can accelerate a recession far beyond what underlying fundamentals would suggest.
Dimon also warned that the next credit cycle will likely hit an unexpected sector. He pointed to the story. “There’s always a surprise in a credit cycle. Even if a credit cycle is normal, the surprise has often been what industry. You didn’t expect newspapers in 2000, Warren Buffett’s companies. You didn’t expect utilities and phone companies in 2008 and 2009,” he said, according to CNN.
He hinted that AI-altered software companies could be the next blind spot. JPMorgan has data that suggests some software companies may be overleveraged, although Dimon did not name specific companies, according to CapitalAI Daily.
Dimon sees risks ahead. Uzcategui/Getty Images
Dimon’s comments on first-quarter earnings didn’t come out of nowhere.
At JPMorgan’s investor day on February 24, he compared the current market environment to that of 2005, 2006 and 2007.
“The rising tide lifted all boats, everyone was making a lot of money, people were making the most of it. The sky was the limit,” he said. “My own opinion is that people are getting a little comfortable that this is real, these high asset prices and high volumes and that we won’t have any kind of problems. So we are quite cautious about it,” he added, according to Yahoo Finance.
In last October’s earnings conference call, he was even more direct. “I shouldn’t say this, but when you see one cockroach, there are probably more. Everyone should be warned about this one,” he said, according to Yahoo Finance.
At JPMorgan’s Global Leveraged Finance Conference in March, he said the next credit cycle would be “worse than a normal one” due to widespread complacency among lenders, high debt levels, elevated asset prices and poor underwriting, according to Miami Beach Today.
First quarter 2026 results call date: April 14, 2026
JPMorgan Private Credit Exposure: About $50 Billion, According to American Banker
Total size of private credit market: $1.7 trillion, according to American Banker
JPMorgan’s nonbank financial institution loan portfolio: approximately $160 billion, according to American Banker
First quarter 2026 credit loss provision: Decreased quarter over quarter, according to American Banker
JPMorgan net income in 2025: $57 billion on total revenue of $185 billion, according to Invezz
Dimon’s warning is not a call to panic. He explicitly said the U.S. economy remains resilient, largely thanks to a stable labor market.
But its consistent pattern of increasing caution over the past few months tells investors something important. The head of the country’s largest bank, whose first-quarter results were strong, still notes publicly that credit conditions are deteriorating beneath the surface.
For investors who have exposure to private credit, leveraged loans or highly valued growth stocks, that warning deserves attention. The last time Dimon compared the market environment between 2005 and 2007, he was ahead three years. He wasn’t wrong.
Related: JPMorgan has a tough message for investors about market weakness
This story was originally published by TheStreet on April 19, 2026, where it first appeared in the Markets section. Add TheStreet as a preferred source by clicking here.
