Jamie Dimon Sounds Alarm on Market Complacency After US Credit Downgrade

JP Morgan CEO Jamie Dimon has issued a stark warning to investors and policymakers, cautioning against what he calls “extraordinary complacency” in global markets following Moody’s recent downgrade of the US credit rating.

Speaking at the bank’s annual investor meeting in New York, Dimon criticized central banks and investors for underestimating systemic economic risks. “We have huge deficits and what I consider almost complacent central banks. You all think they can manage all this—I don’t,” he said.

The warning comes days after Moody’s stripped the US of its last remaining triple-A rating, cutting it to AA1. The agency cited America’s ballooning $36.2 trillion debt, lack of fiscal discipline, and rising interest costs. While financial markets briefly wobbled on the news, stock indices quickly stabilized, with the S&P 500 and Nasdaq reversing losses by Monday’s close.

Dimon’s bigger concern is the looming threat of stagflation—a scenario where inflation remains high even as economic growth stalls. “The probability of stagflation is much higher than markets currently reflect,” he noted.

Despite the downgrade, Trump administration officials sought to downplay the move. Treasury Secretary Scott Bessent dismissed Moody’s decision as “a lagging indicator.” Meanwhile, former President Donald Trump remained focused on political distractions, using his Truth Social account to attack celebrities rather than address the economic fallout.

Trump’s controversial tax cut and spending package, which advanced through a key House committee in a rare Sunday vote, is expected to add up to $5 trillion to the national debt over the next decade. Moody’s criticized both parties for their failure to implement meaningful fiscal reforms, warning that “persistent, large fiscal deficits will drive the government’s debt and interest burden higher.”

Bond markets showed signs of pressure, with 30-year US Treasury yields climbing to 5.026%, indicating investor anxiety over long-term US fiscal health. The US dollar also slipped against a basket of global currencies.

Moody’s emphasized that without structural changes to entitlement programs and spending, the US fiscal outlook will deteriorate—both compared to its historical norms and to other top-rated sovereigns.

Dimon’s remarks echo growing unease among financial leaders that markets may be misjudging the long-term risks. As the US faces rising deficits, potential stagflation, and political gridlock, the JP Morgan chief’s message was clear: ignoring the warning signs could prove costly.