Dimon expects tariffs to make “the soft landing a little bit softer”

Key Points

• Jamie Dimon warns that incoming tariffs may start showing effects in H2, likely softening the "soft landing" by slightly reducing employment and nudging inflation higher.
• Citigroup’s Viswas Raghavan says clients are preparing for tariffs of 10–20%, yet banks expect mid-single-digit revenue gains in trading and investment banking despite a potential rise in credit costs by a few hundred million dollars.
• Morgan Stanley CEO Ted Pick notes a slow Q2 start after the tariff announcement but foresees a strong finish, calling investment banking a "tale of two quarters."

At a Morgan Stanley conference in New York on Tuesday, Jamie Dimon, the CEO of JPMorgan Chase, expressed a cautiously optimistic assessment of the possible economic impact of tariffs. In the second half of the year, he said, the true effects might begin to show. “Maybe in July, August, September, October, you’ll start to see ‘did it have an effect?’” Dimon said. “My guess is it did, hopefully not dramatic. May just make the soft landing a little bit softer as opposed to the ship go down.” Dimon predicts a slight shift in employment and inflation, saying, “My guess is that employment will come down, or come down a little bit, while inflation will go up a little bit.”

Dimon expects tariffs to make “the soft landing a little bit softer”

Jamie Dimon wasn’t the only banking executive addressing tariff concerns. Citigroup’s global head of banking, Viswas Raghavan, noted that clients are bracing for tariff levels starting at 10%, with some preparing for rates as high as 20%. In reference to boardroom talks about potential future deals, he remarked, “Look, there is a lot of anxiety.”

Despite the uncertainty, Raghavan stated that Citigroup anticipates trading revenue to rise in the “mid- to high-single digits” and second-quarter investment banking fees to rise in the “mid-single digits” year over year. But he also cautioned that firmwide credit costs, which were $2.7 billion in the first quarter, might increase by “a few 100 million dollars.”

The second quarter got off to a slow start because of the Trump administration’s announcement of new tariffs in April, which Morgan Stanley CEO Ted Pick described as “really pausing in a big way.” He still anticipates a recovery. “Now it has picked up and I think we’ll see how the last couple weeks go, but looks like it’s going to finish strong,” Pick explained. “I do think investment banking, specifically, is a tale of two quarters.”

Executives discussed financial regulation in addition to tariff issues. Pick supported initiatives to review capital regulations, which mandate that banks maintain excess capital to act as a buffer in times of economic weakness. “We actually are relevant in not just powering the real economy, but to be helpful when there is a wobble… And that’s why I think it is opportune for a repositioning of some of the regulatory framework,” he said.

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