JPMorgan Chase Chairman and CEO Jamie Dimon. (Michael M. Santiago/Getty Images)
(CNN) -- JPMorgan Chase CEO Jamie Dimon issued a stark warning to Wall Street on Wednesday: Inflation could rise further and recession is not out of the question.
"A lot of things we're seeing are dangerous and inflationary. Be prepared," he said at The New York Times DealBook Summit 2023 in New York. "Interest rates can go up and that could lead to a recession."
Governments around the world need more money, he explained, to fund the green economy, remilitarize and address energy crises, and all of that will be inflationary.
"I'm cautious about the economy," he said. The U.S. labor market has shown resilience, but "inflation is affecting people."
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The stimulus money that was delivered during the Covid-19 lockdowns and quantitative easing by the Federal Reserve injected "drugs directly into our system" and generated a "high level of sugar" economically, Dimon explained. But that's fading away. "I think easing and quantitative tightening and these geopolitical issues can have an impact," he said.
In previous interviews, Dimon has said that the Federal Reserve may be far from done with its aggressive regime of interest rate hikes in its fight against high inflation, and that the central bank may keep raising rates another 1.5 percentage points, to 7%.
Dimon emphasized that this may be the most dangerous time the world has experienced in decades, and that the wars in Ukraine, Israel, and Gaza could have far-reaching impacts on energy and food supplies, trade, and geopolitical relations. It could even, he said, lead to "nuclear blackmail."
Humanity faces enormous risks, he said. One of them is, of course, the war in Eastern Europe and the Middle East. But beyond that, Dimon worries about nuclear proliferation, climate change and the risk of another pandemic.
The U.S., he said, needs to make sure it has "the best military in the world, bar none." It's an expensive task, he said, but the stakes are high: "It's about keeping the Western world together," he said at the event. "We need American leadership to make sure that all of this stays together. I don't want a book written in 50 years about how the West lost."
Business in China
JPMorgan Chase does business with TikTok's parent company, ByteDance, and is partially funding the planned initial public offering of Chinese fast-fashion company Shein, according to a recent Reuters report.
Dimon said Wednesday that he will follow the U.S. government's lead when it comes to doing business in China, but that he believes companies like Shein do not pose a threat to U.S. national security.
While some U.S. lawmakers have said TikTok is a threat to national security, Dimon responded that JPMorgan Chase conducts due process with all of its clients.
"I'm not afraid of China," he said.