JPM CEO Letter: Tough To Square With Such Positive Spread Conditions

Jamie Dimon, JPM CEO, has published his annual letter to shareholders which does seem to beg a question of the very positive credit conditions, both primary and secondary, which we are currently experiencing.

• Inflation and rates: Dimon notes the US economy being fuelled by large amounts of deficit spending and past stimulus measures and that pressures to boost green spending, address supply chain realignments, grow military spending and address rising healthcare costs will likely incur further spending. He clearly does not see the inflation dragon as slain, yet.
• Quantitative tightening: he notes QT is draining USD900bn from the system annually and that this scale of tightening has never been seen before. We wonder whether he is aware of tail risks appearing from unexpected places, let alone the obvious non-bank lending (private credit) narrative that is well understood.
• Geopolitics: Dimon states that “we may be entering one of the most treacherous geopolitical eras since World War II”. This needs no comment.