Dimon advises stocking bullets, not Bitcoin, amid economic and security concerns

Jamie Dimon, Chairman and CEO of the international investment bank JPMorgan Chase, offered striking assessments on a wide array of topics, from the US economy and national security to technological advancements and leadership, during an interview with Fox Business at the Reagan National Economy Forum last week.

Dimon specifically addressed the Senate bill concerning spending cuts and the continuation of tax rates, emphasizing the importance of stability to enable business investment and foster growth.

‘I am excited that they passed the bill’

Commenting on the Senate bill, which some senators criticized for insufficient spending cuts, Dimon stated, “First of all, I am excited that they passed the bill.”

Noting that House Speaker Mike Johnson did “an incredible job” on this matter, Dimon expressed that the Senate should also finalize the bill.

Dimon assessed, “Increasing stability, ensuring tax rates continue, and allowing small and large businesses to invest is genuinely important for growth. If we look back at the 2017 bill, it brought trillions of dollars back to the US and created numerous jobs and significant growth. Those examining these figures are not actually articulating what they represent. So, it will work.”

Dimon later suggested that instead of implementing cuts in areas such as Medicare, Medicaid, and Social Security, the focus should be on enhancing efficiency, adding, “I think it is better for them to conclude this matter as effectively as possible. The smaller the deficit, the better.”

When queried about his confidence in the extension of tax cuts, Dimon replied, “Not so much for JPMorgan. However, if you converse with small businesses uncertain whether their rate will be 28% or 40%, they require it. If you speak with numerous companies engaged in substantial R&D or significant equipment expenditure, they need certainty.”

He stressed that uncertainty must be dispelled promptly to prevent the postponement of investments.

‘Bond markets will face a challenging period’

Addressing concerns regarding debt and budget deficits, Dimon described this as a “major issue” and a “genuine problem.”

Dimon cautioned, “One day, bond markets will face a challenging period. I do not know if it will be in six months or six years. Therefore, I believe we need to concentrate on this.”

Asserting that the primary focus should be on growth, pro-business policies, appropriate regulations, permit reforms, and the reduction of bureaucracy, Dimon said, “Achieve this growth. That is the optimal path. Then, reform certain programs that everyone acknowledges can be appropriately reformed.”

When asked to clarify his statement about a potential “break” in the bond market, Dimon explained, “What the public needs to comprehend is that approximately $30 trillion worth of securities are traded daily. These are investors from across the globe. Foreigners hold $35 trillion in American securities. They possess roughly another $30 trillion in private investments in the US. People vote with their feet and will scrutinize the country, the rule of law, inflation rates, central bank policies, what they wish to hedge against, and what they do not.”

Dimon stated that these rates are not dictated by central banks but can be influenced, “If people decide that the American dollar is not where it ought to be, yes, you could see spreads widen, credit spreads widen. And that develops into a problem.”

Recalling that this scenario occurred previously during the COVID period, in 2019 and 2020, Dimon remarked, “It will happen again, I can almost guarantee you. I just do not know precisely when or what the trigger will be.”

Dimon noted that such volatility would adversely affect small businesses raising capital and credit markets, rather than large banks.

Growth expectation for the second half of the year

When asked about growth expectations for the latter half of the year, Dimon indicated that his own economists project a figure around 1.5%, but he himself is uncertain.

Stating he did not concur with Kevin Hassett’s 4% growth forecast, Dimon commented, “I hope he is correct. I simply do not know.”

Also touching upon JPMorgan’s own growth figures, Dimon explained that the company’s success stems from 15 years of continuous investments, new branches, new bankers, and dedicated customer service.

Dimon said, “Profits fluctuate for many different reasons, but we enjoy undertaking this, and we are quite confident that we can expand our company.”

Expressing that they encounter significant competition, including from fintech companies and foreign banks, Dimon observed, “I always examine those who outperform us and the reasons for their success; I do not merely focus on our own performance.”

‘Stablecoins, data, and real-time payments have a future’

Responding to a question about the impact of stablecoin legislation on banks, Dimon replied, “Firstly, we have a JPMorgan Coin. If by crypto you mean stablecoins, moving data, real-time payments, and combining data and payments, these elements are real. We will be at the forefront of this.”

Stating that JPMorgan Coin can currently move money and data, and that they plan to open it to external use in the future, Dimon highlighted the importance of legal regulations such as anti-money laundering (AML), the Bank Secrecy Act (BSA), and Know Your Customer (KYC) protocols.

Dimon said, “We already transfer $10 trillion daily, and that is digital. There will be very beneficial applications for blockchain.”

Noting that JPMorgan invests approximately $20 billion in technology, Dimon specified that this expenditure covers areas such as networks, large data centers, artificial intelligence policies (mentioning that billions have already been allocated to AI alone), and cybersecurity (billions of dollars to protect customers).

China observations and US internal problems

Sharing observations from his recent visit to China, Dimon acknowledged that cyberattacks are a significant issue but stated, “I am not afraid of them.”

Observing that China is forging its own path with substantial investments in areas like artificial intelligence, automobiles, and robotics, Dimon remarked, “They will possess 30% or 40% of new pharmaceuticals in a short period. They are proceeding in their own way. However, they also have vulnerabilities. They still contend with considerable poverty. They exist in a very challenging neighborhood. Many of their neighbors are rearming. They must contend with us. We remain the most prosperous economy on the planet.”

Emphasizing that his primary concern is not China, but the US’s “inability to resolve its own internal problems,” Dimon asserted, “If America manages its affairs correctly—deregulation, permits, education, pro-business policies, economic expansion, aiding low-income individuals through economic growth, rectifying immigration—we will be in an excellent position. In 30 or 40 years, we will be the preeminent military and economic power. If not, the world will be a vastly different place from what we experience today.”

‘We should stock bullets, tanks, and missiles, not Bitcoin’

Also addressing national security policies, Dimon stated that the world relies on the US military umbrella, and this is significant.

“It becomes a problem if countries begin to look elsewhere for their national security. This is directly linked to their economic security,” Dimon said, underscoring the importance of issues such as investment, development finance, and the education of American values, in addition to trade.

When asked what should be stocked, referencing a prior statement, Dimon replied, “I said we should stock bullets, tanks, and missiles, not Bitcoin.”

Stressing that the most crucial element for national security is resilient supply chains, Dimon declared, “From medical supplies to everything that goes into our F-35s, rare earth elements, and related items. Things like two-nanometer AI chips. Yes, we assert this is important for American national security. We require resilient supply chains.”

He added that the military needs greater flexibility and multi-year budgeting.

‘Markets are complacent’

To a final question regarding the current state of the markets, Dimon responded, “Complacent. Prices are high; things appear to be progressing smoothly. Prices somewhat indicate a soft landing. I hope that is accurate. I am merely informing people that the probability of this occurring is lower than others perceive, and it will be a surprise. Numerous factors are in motion, from deficits to geopolitics and trade. It is complex, and things can go awry. And when things go awry, it is usually a surprise.”

He further noted that his role is not to predict the future but to be prepared to serve customers regardless of what the future may hold.