Author：Currency Explorer

JPMorgan Chase CEO Jamie Dimon said the United States needs to “become stronger” to maintain its military and economic dominance, and elaborated on the bank’s ambitious plan to mobilize more than $1 trillion to ensure this goal is achieved.

In his letter to shareholders released Monday, Dimon wrote, "As long as policies are sound and actions are decisive, the United States can retain its position as the strongest military and the strongest economy, and continue to be a bastion of freedom and an arsenal of democracy." But he also warned, "No country is born to succeed."

Dimon's latest statement follows the launch of the second of two major initiatives by JPMorgan Chase aimed at addressing macroeconomic policy issues. Last week,The bank has just launched the "American Dream Initiative," aimed at creating more "economic springboards" for American communities.Prior to this, in October, JPMorgan Chase had already announced a "Safety and Resilience Initiative."They pledged to invest $1.5 trillion over the next decade to heavily support industries that can strengthen the security and resilience of the American economy.

These moves also mark the beginning of a new chapter in Dimon's career at the helm of JPMorgan Chase. His keen interest in policy has long been an open secret, and speculation about a possible government appointment in Washington has circulated for decades, though it has yet to materialize. Now, the man who has led the bank for over 20 years stands at the pinnacle of power at JPMorgan Chase, pushing forward with his own policy agenda.

“We have a responsibility to help develop the right policies, not only for our company, but also for the country and the world,” Dimon wrote. “Only when the country prospers can many businesses truly thrive.”

Dimon, who just turned 70 last month, single-handedly built JPMorgan Chase into the largest and most profitable bank in the United States, and he himself has become a highly respected "veteran" in the banking industry.His highly anticipated annual letter to shareholders is now increasingly venturing into broader areas, extending its reach beyond banking itself to macroeconomic policy domains.

Geopolitical issues

In this year's long letter, which is 48 pages long including footnotes,The longest chapter is titled "Key Issues Facing the United States and the World".

He pointed out that one of the key issues is the ongoing conflicts around the world, which "should shatter the illusion that the world is safe."

For years, Dimon has been sounding the alarm about geopolitical risks, repeatedly emphasizing that throughout his career, the threat of geopolitics has far outweighed any other concern. He writes that the war with Iran carries the risk of significant volatility in future oil and commodity prices, and as for whether it can achieve the region's short- and long-term goals, "time will tell."

Damon believes thatThe United States cannot succeed without Europe, but Europe "is currently on a wrong path."He reiterated his call for "a grand and perfect free trade agreement covering the whole of Europe" in exchange for reforms in the economic and military spheres.

Furthermore, regarding the war with Iran, he wrote, "Now, due to the war with Iran, we must also be wary of the potential risk of continued severe damage to oil and commodity prices. Coupled with the reshaping of global supply chains, this could make inflation more stubborn and ultimately cause interest rates to surge above current market expectations."

Dimon stated that time will tell whether a war with Iran will achieve America's strategic goals. He added that nuclear proliferation remains the greatest threat posed by Iran.

After last year's loose monetary policy propelled US stocks to historic highs, war-induced inflationary anxieties have largely dampened market expectations for a Federal Reserve rate cut this year.

Last week, the benchmark S&P 500 delivered its worst quarterly performance since 2022. The war and the resulting surge in energy prices have been dragging down the index since late February.

Dimon pointed out that the U.S. economy remains resilient, with consumers still having income and money to spend (although recent spending momentum has been slightly weak), and corporate fundamentals remain strong.

But he also sounded the alarm, sayingThe current economic boom is largely fueled by massive government deficit spending and past stimulus measures.Meanwhile, the demand for increased investment in infrastructure continues to grow.

Dimon stated that the fiscal benefits from President Trump's "grand and perfect bill," deregulatory policies, and capital expenditures driven by the artificial intelligence boom are also other positive factors supporting the economy.

Risk of Private Equity Lending Defaults

In his letter to shareholders, Dimon also included private lending on his blacklist of potential future risks. Last year, the JPMorgan Chase CEO warned that some emerging credit losses could be a warning sign, indicating that there are more hidden risks lurking in the financial system.

In recent months, a series of high-profile defaults and frauds, coupled with concerns that artificial intelligence may disrupt software companies, have continued to put pressure on direct lending institutions. This has led to a surge in investor withdrawals from funds managed by asset management firms such as Blue Owl Capital Inc.

Damon said,Private lending "most likely" will not trigger systemic risk. However, he warned that losses from leveraged loans will exceed expectations, partly due to a "moderate" easing of credit standards.

“Overall, private lending often lacks transparency and there are no strict valuation ‘benchmarks’ for its loans, which increases the probability of panic selling by investors. As long as they feel that the overall environment is going to worsen, they will rush to sell even if the actual losses are almost unchanged,” he said.

He also expressed some concerns about the private equity industry, saying that it was "a bit puzzling" that these alternative asset management firms didn't take advantage of the good market conditions to list more of their subsidiaries. He pointed out that, instead, some companies were being transferred into continuation funds.

“The average holding period for private equity investments is now seven years—almost twice as long as it used to be,” he emphasized. “Since the global financial crisis, we have basically been in a bull market—it’s hard to imagine what would happen if we had encountered a prolonged bear market.”

Dimon also used the letter to launch a fierce attack on the revised capital rules proposed by U.S. bank regulators last month, calling some of the provisions "utter nonsense."

Banking giants such as JPMorgan Chase had previously fought tooth and nail to try to significantly weaken the impact of the so-called "Basel III" and the draft rules on additional capital for GSIBs (Global Systemically Important Banks) to be released in 2023.

On Monday, Dimon bluntly stated that the proposals were still "full of loopholes." He added that JPMorgan Chase's GSIB additional capital requirement (i.e., the capital buffer required for such banks) had only been reduced to 5.0%. He denounced this figure as punishing the bank's success, calling it not only "absurd" but also "against the American spirit."