Jamie Dimon says these are the 2 biggest risks to the economy

Although the U.S. economy has been resilient, with slowing inflation and a consistently strong labor market, JPMorgan Chase (JPM) CEO Jamie Dimon still sees two “significant risks” to the economy.

“Ongoing and future spending requirements will likely be inflationary, and therefore, inflation may persist for some time,” Dimon said in the bank’s fourth-quarter earnings report on Wednesday. “Additionally, geopolitical conditions remain the most dangerous and complicated since World War II.”

That warning came as the largest U.S. bank by assets posted its biggest-ever annual profit, and beat Wall Street expectations across the board. The bank said it generated $14 billion in net income in the fourth quarter of 2024, a 50% surge from a year prior, and $58.5 billion for the year.

Revenues also came in above projections, for a total of $42.8 billion, up 11% from the same period a year ago.

Despite the bank’s continued record-breaking results, Dimon has repeatedly cautioned about the spillover effects of ongoing geopolitical conflicts, including wars in the Middle East and Europe.

In October, Dimon said that global “conditions are treacherous and getting worse,” echoing similar remarks from a year earlier that it is “the most dangerous time the world has seen in decades.”

“As always, we hope for the best but prepare the firm for a wide range of scenarios,” Dimon said Wednesday.

Businesses are also bracing for potential inflationary impacts tied to the incoming Trump administration’s policies, such as plans for general tariffs of up to 20% on imported goods from all countries and other proposals that could add to the more than $36 trillion national debt. Economists at Goldman Sachs (GS) have warned that such sweeping tariffs could briefly send inflation back up above 3%.

For the most part, however, Dimon and other bankers are looking forward to President-elect Donald Trump’s return to the White House — and the more friendly regulatory environment expected to come with it.

Dimon said the goal isn’t weakening regulation, but “rather about setting rules that are transparent, fair, holistic in their approach and based on rigorous data analysis, so that banks can play their critical role in the economy and markets.”

A handful of Wall Street giants kicked off earnings season Wednesday by topping expectations. Goldman Sachs said it saw $13.87 billion in net revenues for the three months ended Dec. 31, and net earnings of $4.11 billion, blowing past analyst expectations. Wells Fargo (WFC) reported net income of $5.1 billion and $20.38 billion in revenues.

On the heels of its massive corporate overhaul, Citigroup (C) posted $2.9 billion in net income last quarter on revenues of $19.6 billion. That’s compared with a $1.8 billion loss the year before.

Bank of America (BAC) and Morgan Stanley (MS) are slated to release earnings Thursday.