Dimon warns Iran war could sink economy into a recession

JPMorgan Chase CEO Jamie Dimon is warning that the Iran war could lead to prolonged inflation and higher interest rates that ultimately could tip the U.S. economy into a recession.

“The skunk at the party — and it could happen in 2026 — would be inflation slowly going up, as opposed to slowly going down. This alone could cause interest rates to rise and asset prices to drop,” Dimon said in his annual letter to shareholders on Monday.

“Interest rates are like gravity to almost all asset prices,” he added. “And falling asset prices at one point can change sentiment rapidly and cause a flight to cash.”

Dimon said the U.S. is generally less vulnerable to the rapid increases in oil prices that helped drive the recessions in 1974 and 1982, but warned of the risk of oil and commodity price shocks in the months ahead.

“Despite the unsettling landscape, the U.S. economy continues to be resilient,” Dimon wrote in the letter, noting consumers are still “earning and spending (though with some recent weakening) and businesses [are] still healthy.”

“Now, because of the war in Iran, we additionally face the potential for significant ongoing oil and commodity price shocks, along........

© The Hill