(Updates with Jamie Dimon's take on UK taxes for banks in the sixth and seventh paragraphs.)
JPMorgan Chase (JPM) Chief Executive Jamie Dimon said Tuesday financial markets may be showing "a little bit too much exuberance," warning that investors could be underestimating inflation risks and broader geopolitical tensions.
In an interview with Bloomberg TV, Dimon said investor optimism appears tied partly to hopes for some resolution in the Middle East, though he noted ongoing risks involving Ukraine, Russia and US-China relations.
Dimon said inflation remains a concern following weaker-than-expected economic data, adding that increased government spending and stimulus measures have helped support corporate profits and market performance but could also add to inflationary pressures.
He said deregulation, low credit spreads and strong corporate earnings have contributed to favorable market conditions, though he expressed skepticism over whether current optimism is fully justified.
Dimon added that deficit spending has been driving "corporate earnings" and capital expenditures, but said it remains unclear whether higher investment spending will improve productivity before fueling inflation further.
The CEO also cautioned the UK that any decision to increase taxes on banks if Keir Starmer is replaced as prime minister would result in JPMorgan Chase scrapping plans to invest billions in a new London headquarters in Canary Wharf.
"We didn't damage the UK in any way, we paid probably $10 billion in extra taxes by now. I don't think that's right or fair. If that happens too much we will reconsider," Dimon told the media outlet at the bank's annual Global Markets conference.
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