JPMorgan Chase Chairman and CEO Jamie Dimon warned that losses on leveraged lending in the next credit cycle are likely to be 'worse than people expect relative to the scenario.' Speaking during the bank's earnings call, Dimon said JPMorgan is preparing for a possible recession and stagflation, which could put stress on leveraged companies as they refinance. The warning comes as major U.S. banks reported strong second-quarter profits, with trading revenue boosted by volatile markets and wealth management fees rising on higher asset valuations. However, rising credit card and auto loan delinquencies signal growing financial strain on some households, with auto loan balances reaching $1.69 trillion in the first quarter according to the Federal Reserve Bank of New York.
JPMorgan Chase & CoDimon warns that leveraged lending losses in the next credit cycle will be worse than expected, and JPMorgan is preparing for recession/stagflation.
Bank of America CorpDimon's warning of worse-than-expected credit losses and potential recession/stagflation signals broader economic weakness that could hurt bank earnings.