The CEO of JPMorgan wouldn't go long on bonds or rush into the S&P 500. What is he looking at?

JPMorgan Chase CEO Jamie Dimon said in an interview with TV host Wilfred Frost that he would not buy long-term U.S. Treasury bonds right now and does not consider the broader U.S. stock market an obvious entry point. Dimon himself prefers to look at individual companies’ stocks, takes into account the risk of persistently high interest rates, and warns that the promise of artificial intelligence does not guarantee success for every company in the sector.

The most direct answer in the interview concerned U.S. Treasury bonds. When asked about buying them, Dimon replied: “Personally, no. I wouldn’t do it.” Even with 2% inflation, he estimates that the yield on 10-year Treasuries should be 4–4.5%. “And today it’s almost there,” the banker explained.

When it came to stocks, his response was less definitive. Dimon said he evaluates the stocks of individual companies and is not in favor of investing in the S&P 500 as a single asset. The banker admitted that he himself had not bought any stocks recently. When asked if he was willing to invest heavily at current prices, the JPMorgan CEO replied in the negative. However, he did leave open the possibility of buying a specific stock: “If you came to me and said this was a great investment, I would consider it.”

The head of JPMorgan attributed his caution regarding bonds to the state of public finances. According to him, the debt-to-GDP ratio in the U.S. and on average across Europe stands at around 100%. The U.S. budget deficit stands at about 6% of GDP, while the global average is nearly 5%.

“These are very high debt and deficit figures, even though the economy is doing quite well right now,” said Damon. “Usually, such figures require a severe recession, a depression, or a war.” The preferred option for the authorities is to acknowledge the problem early on and come up with a solution. The other option is to wait until the situation worsens. “I believe that’s exactly what will happen,” the banker said.

The consequences could include higher interest rates and increased volatility in the debt market, the head of JPMorgan warned. He also mentioned “bond vigilantes”—investors who sell off government bonds in response to unsustainable fiscal policy, thereby driving up borrowing costs. “Let’s hope nothing serious happens, but it could be worse,” he added.

Damon did not describe U.S. stock valuations as excessive: as the company’s earnings grow, they may eventually justify those valuations. He cited the banking sector as an example of a favorable market environment. He described the current conditions for banks as “almost as good as they can possibly be”: transaction volumes are high, asset prices have risen, and clients are actively trading. “This may continue for some time, but eventually it will come to an end,” the JPMorgan CEO emphasized.

Damon believes that artificial intelligence is a real technology that will create significant economic value. “Despite all the hype, AI is real,” he said. According to him, overall, AI “should be of great benefit to humanity.”

Overall, according to the head of JPMorgan, investments in AI will most likely pay off—just as investments in the internet did. But this will not happen in the way or within the timeframe that companies and investors are expecting. “Will it pay off the way you expect, and when you expect it to? Definitely not,” the banker is certain.

Damon compared the current AI boom to the early days of the internet. “We had Yahoo, Netscape, and all those companies that went bankrupt. But Google survived, Facebook survived—and [now] they’re big, influential companies,” he noted.

This article was AI-translated and verified by a human editor