JPMorgan CEO Jamie Dimon Warns of Stagflation Risks from Iran War and Geopolitical Conflicts

JPMorgan Chase CEO Jamie Dimon warned in his 2026 annual letter to shareholders that protracted foreign conflicts, including the war in Iran and Russia's invasion of Ukraine, could lead to stagflation. Stagflation combines recessionary elements with persistent inflation.

Dimon noted scenarios where inflationary forces overcome deflationary ones, potentially causing inflation to rise slowly in 2026. Dimon stated that such an outcome, described as the "skunk at the party," could result in higher interest rates and declining asset prices.

The letter mentioned "America" more than 80 times, outlining goals for infrastructure, military strengthening, and preserving the American dream. The Iran war, which began in late February 2026, has entered its sixth week with no clear end in sight.

Donald Trump demanded that Iran open the Strait of Hormuz to reduce oil prices. m. ET for a deal, threatening severe military action if unmet. About one-fifth of the world's oil supply passes through the Strait. Several economists have warned of stagflation risks since the Iran war's start, particularly if it extends for months.

The Bureau of Labor Statistics reported the consumer price index at an annual rate of 2.4% in February 2026, but this excludes post-war price changes. The Organization for Economic Cooperation and Development forecasted U.S. inflation could reach 4.2%.

Preston Caldwell, chief U.S. economist at Morningstar, predicted the personal consumption expenditures index at 3.6% annually, an increase of one percentage point from earlier forecasts.

argued that stagflation fears are unwarranted, comparing the situation to the 1970s but noting greater U.S. structural resilience and lower dependence on petroleum. Spending on petroleum products was 3.3% of total personal consumption in 2025, less than half the 8.3% average in the 1970s.