Jamie Dimon says he wouldn't buy stocks or Treasurys at current prices

• Dimon expects the 10-year Treasury yield should be 4% to 4.5% even if inflation returns to the Fed's 2% target, with current yields around 4.6% and little upside for bond prices.
• He expressed caution about stock market valuations at current highs, preferring to look for individual company investments rather than broad market exposure.
• Dimon compared AI investment surge to the internet boom, noting companies are spending 'huge' amounts that may not quickly deliver expected returns, though it will likely pay off long-term.

Summary

Key Statement: JPMorgan Chase CEO Jamie Dimon stated in a Monday interview that he would not purchase stocks or long-term Treasury bonds at current prices, citing underappreciated geopolitical and fiscal risks.

Main Concerns:

• Geopolitical risks: Ongoing conflicts in Ukraine and the Middle East, plus U.S.-China tensions
• Fiscal risks: Growing global budget deficits amid rising defense spending
• Interest rate outlook: Dimon believes the 10-year Treasury should trade at 4-4.5% even if inflation reaches the Federal Reserve's 2% target

Key Data Points:

• Current 10-year Treasury yield: approximately 4.6%
• Yields have remained above 4.2% since March
• Most recent CPI data: 3.5% year-over-year, well above the Fed's 2% target
• JPMorgan Chase stock: $338.87 (-0.65%)

Market Implications:

Dimon expressed caution on stock market valuations, suggesting investors should focus on individual companies rather than broad market exposure. He sees limited upside for bond prices given his expectation for persistently elevated interest rates.

Regarding artificial intelligence investments, Dimon compared the current AI spending surge to the internet boom, acknowledging companies are spending "huge" amounts that may not deliver expected returns on anticipated timelines. While he believes AI will ultimately pay off like the internet did, he warned against expecting quick or predictable results.

The Federal Reserve maintained rates at its June meeting, with Chair Jerome Powell signaling intolerance for elevated inflation. Market expectations for rate cuts have declined significantly, with the CME FedWatch tool indicating rates will likely remain steady or rise before year-end.