Jamie Dimon warns 8 risks are building ‘like tectonic plates’ beneath the US economy — and a financial earthquake could be next

While it's not all doom and gloom — he pointed to bright spots such as increasing fiscal stimulus and AI-driven capital spending — he also outlined eight major risks that could hurt the economy.

8 major risks for the economy

The greatest of those risks, Dimon wrote, is geopolitics — from Russia's war in Ukraine (going on four years) and now a war in Iran.

Given the complexity of today's global supply chains, conflicts can still impact economies that aren't directly involved in those conflicts. The war in Iran, for example, has caused fuel prices to soar and created severe shortages in regions dependent on the flow of liquefied natural gas through the Strait of Hormuz, such as China, India, Japan and Southeast Asia.

"Nations that are heavily dependent upon imported energy are already seeing the effects," wrote Dimon. "And it's not just energy, it's commodity products that are byproducts of oil and gas, like fertilizer and helium."

Geopolitical risk is compounded by other risks, such as trade wars. While Dimon wrote that U.S. tariffs had "only minor effects" on inflation, he also said "trade battles are clearly not over." This is creating a realignment of global economic partnerships — and the long-term implications of this are unclear.

According to Dimon, other risks include a strained relationship with China, cyber risks in an AI-driven world, elevated global deficits and debt, a highly leveraged private credit market and the fact that private equity firms "have not taken greater advantage of healthy markets to take their companies public." High asset prices and low credit spreads also create risk if anything goes wrong.

Could a financial earthquake be next?

Dimon warns that protracted foreign conflicts could lead to a recession. While in certain scenarios a recession can reduce inflation, in other scenarios it can lead to stagflation, which is a toxic combination of high unemployment, high inflation and stagnate growth.

"The skunk at the party — and it could happen in 2026 — would be inflation slowly going up, as opposed to slowly going down," Dimon wrote. "This alone could cause interest rates to rise and asset prices to drop."

While it's unclear how long the conflict in Iran will drag on, "a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation, with adverse consequences for growth," according to the OECD Economic Outlook for March 2026 (3, 4).

The OECD projects that annual GDP growth in the U.S. will moderate from 2.0% in 2026 to 1.7% in 2027, "as strong AI-related investment is gradually offset by a slowdown in real income growth and consumer spending."

Mohamed El-Erian, chief economic advisor at Allianz, told CNBC that a lot depends on the duration and spread of the war in Iran. "The more it spreads, the more stagflationary it is for the global economy." If the conflict drags on — and if it widens across the Middle East — it could "fuel inflation, disrupt supply chains and undermine growth (5, 6)."

On the other hand, Preston Caldwell, chief U.S. economist at Morningstar, expects inflation to trend downward — once energy spikes have passed. "Meaningful slack in the labor market and broader economy should ensure inflation resumes converging to the Fed's 2% target after the 2026 inflation spike," he said in a forecast (7, 8).

How to protect your finances from stagflation

In the wake of the Iran conflict, consumer sentiment fell 6% in March. "Overall, the short-run economic outlook plunged 14%, and year-ahead expected personal finances sank 10%," according to March data from the University of Michigan's Surveys of Consumers (9, 10).