JPMorgan Chase & Co. chief Jamie Dimon can’t rule out that the US economy will fall into stagflation as the country faces huge risks from geopolitics, deficits, and price pressures.
“I don’t agree that we’re in a sweet spot,” the chief executive officer said in a Bloomberg Television interview from the lender’s Global China Summit in Shanghai. He added that the US Federal Reserve is doing the right thing to wait and see before it decides on monetary policy.
Fed officials have held interest rates steady this year amid a solid economic backdrop and uncertainty about government policy changes, like tariffs, and their potential impact on the economy. Policymakers have said they see an increased risk of confronting both higher inflation and unemployment.
Earlier this month, the US and China agreed to sharply reduce tariffs for 90 days to hammer out a new agreement, in what promises to be difficult rounds of talks between Washington and Beijing. US President Donald Trump’s tariffs on China will likely remain at a level expected to severely curtail Chinese exports after the 90-day truce, analysts and investors say.
“I don’t think the American government wants to leave China,” Dimon said. “I hope they have a second round, third round, or fourth round, and hopefully it will end up in a good place.”
Trump’s chaotic tariff announcements and efforts to shrink or shutter government agencies have stoked concerns about trade, inflation, unemployment, and a potential recession. Companies are pausing expansion, including lucrative mergers and acquisitions handled by Wall Street dealmakers, bank executives have said.
The biggest US bank also launched its “Center for Geopolitics” this week with research on Russia and Ukraine, the Middle East and global rearmament.
The unit “is both for us, and it’s also to educate clients,” Dimon said. “Clients ask us all the time, what should we do about this country. How do you look at risk?”
JPMorgan among others have indicated that the uncertainty from Trump’s policies may cause clients to sit on the sidelines. Troy Rohrbaugh, co-CEO at JPMorgan’s commercial and investment bank, said earlier this week that its investment banking fees could to fall by a percentage in the mid-teens compared to a year ago — more than analysts had predicted.
Dimon also added that the US has to “attack the deficit problems,” and he also understands why investors may be cutting US dollar assets.
On Wednesday night, House Republican leaders released a new version of Trump’s massive tax and spending bill with a higher limit on the deduction for state and local taxes and other changes in a bid to win over warring GOP factions to support the legislation.
US Treasuries on Wednesday extended their recent selloff, with longer-term securities getting hit the hardest and an auction of 20-year debt receiving a relatively tepid reception. The selloff at one point pushed the yield on the 30-year bond up by as much as 13 basis points to almost 5.10%, its highest level since 2023. Treasuries were little changed in Asia trading on Thursday.
“I don’t worry about short-term fluctuations in the dollar,” Dimon said. “But I do understand people might be reducing dollar assets.”
Bitcoin rose to its highest level on record on Wednesday, eclipsing the previous high from January, as risk sentiment continues to improve after last month's tariff-induced selloff.
Retailers are trying to navigate their way through economic uncertainty in 2025. Tariffs, inflation and lingering fears of a recession have left many Americans uneasy and pulling back on spending.
Because consumer spending accounts for about 70% of U.S. economic activity, a retreat would heighten the odds of contraction for the U.S. economy.
With earnings from major retailers wrapping up, it’s become clear that the trade war launched by the Trump administration is impacting retailers in very different ways.
Walmart earned a public rebuke from President Donald Trump after it said last week that it has already raised prices and will have to do so again this summer, right when the back-to-school shopping season kicks off. Trump told the retail giant that it should “eat” the additional costs created by his tariffs.
Home Depot said Tuesday that it doesn’t expect to raise prices because of tariffs, saying it has spent years diversifying the sources for the goods on its shelves. However, executive Billy Bastek said some products on Home Depot shelves now may disappear. “There’s items that we have that could potentially be impacted from a tariff that, candidly, we won’t have going forward,” Bastek said in a conference call with industry analysts.
While retailers are sorting out how to best operate in a trade war, their customers are taking stock of their finances and the trends are not good. U.S. consumer sentiment declined slightly in May for the fifth straight month, surprising economists, as Americans increasingly worry that President Donald Trump’s trade war will worsen inflation.
The preliminary reading of the University of Michigan’s closely watched consumer sentiment index, released Friday, declined 2.7% on a monthly basis to 50.8, the second-lowest level in the nearly 75-year history of the survey. The only lower reading was in June 2022. Since January, sentiment has tumbled nearly 30%.
Here’s a quick look at some poignant details from retailers reporting quarterly financial results Wednesday.
Target
Target’s sales dropped more than anticipated in the first quarter, and the retailer warned they will slip for all of 2025 year as its customers, worried over the impact of tariffs and the economy, pull back on spending.
Target also cut its annual sales projections. The company now expects a low-single digit decline for 2025 after previously projecting a 1% increase for sales.
Chairman and CEO Brian Cornell said during Target’s conference call that the chain has been dealing with multiple issues impacting its business, including tariffs and declining consumer confidence.
“We have many levers to use in mitigating the impact of tariffs and price is the very last resort,” he said. “Our strategy is to remain price competitive by leveraging the capabilities, long-standing relationships and the scale that set us apart from many of our retail peers.”
TJX
TJX Cos., parent of T.J. Maxx, Marshalls and other stores, has been pegged as one of the potential “winners” of the shifting trade landscape, as Americans try to save money.
That appeared to be the case Wednesday as the company beat both revenue and profit expectations on Wall Street.
And CEO Ernie Herrman said the second quarter is off to a strong start.
“I am convinced that our broad assortments of great brands and fashions, at compelling prices, will continue to be a tremendous draw for shoppers seeking value,” he said. “Further, I am confident that the strength, flexibility, and resiliency of our off-price business model will serve us well in today’s macro environment, as it has throughout our long, successful history.”
TJX maintained its fiscal 2026 forecast, which includes guidance for consolidated same-store sales to be up 2% to 3%.
Lowe’s
Lowe’s first-quarter sales declined slightly to $20.9 billion from $21.4 billion a year earlier, but that was better than Wall Street expected, with the U.S. housing market in a slump.
The home improvement company reaffirmed its 2025 outlook for sales in a range of $83.5 to $84.5 billion. It still expects same-store sales to be flat to up 1%.
President and CEO Marvin Ellison said during the company’s conference call Wednesday that approximately 60% of Lowe’s purchases originate in the U.S. and about 20% of its purchase volume is currently concentrated in China.
“Although we’re pleased with this reduced dependency, we’re not satisfied and we’re working to accelerate our diversification efforts,” he said of the company’s product sourcing.
Ellison added that Lowe’s expects to continue to be competitive on its prices.