Jamie Dimon: Why I Won't Buy Bonds, AI's Future & Leadership Lessons

Jamie Dimon says he will not personally buy long-dated government bonds. Even assuming 2 percent inflation, he thinks the 10-year yield should be around 4 to 4.5 percent and the short rate at 3.25 to 3.5 percent. His caution rests on a fiscal backdrop where global debt to GDP is roughly 100 percent, the US deficit is running at 6 percent, and the world deficit is close to 5 percent, levels he says are unusual outside of great recessions, depressions, or wars. He predicted the deficit problem will not be resolved maturely and will instead show up through higher interest rates and rattled bond markets. He also said inflation numbers should not be given too much credence, citing the post-1974 precedent of inflation climbing from 3 percent to 11 percent despite lower deficits as something he cannot dismiss.

Dimon said AI spending is huge and will probably pay off in total just as the internet did, but not in the way or on the timeline investors currently expect. He noted there are 8 million available AI and cyber jobs, suggesting AI is creating more jobs than it is eliminating at present, and said companies will become more disciplined about AI spending by measuring returns and finding cheaper alternatives.

JPMorgan reported its highest ever quarterly profit of 21.2 billion dollars, up 41 percent, and Dimon described the current environment as almost as good as it gets, with high volumes, high asset prices, and heavy trading activity, while cautioning that favorable conditions will eventually end. He disputed Lloyd Blankfein's implied universal vulnerability during the 2008 crisis, stating JPMorgan had zero chance of going bust due to far more capital and liquidity than most peers, contrasting with Blankfein's own estimate that Goldman Sachs had a 15 to 20 percent chance of failing. JPMorgan's market cap has grown approximately eightfold to 900 billion dollars since Dimon took over in 2006, when the bank was the third or fourth largest in the US, while rival banks that were larger at that time have grown only roughly 1.5 to 2 times since then.

Dimon identified tail risks including Ukraine, the Middle East, terrorism, Iran, global deficits, remilitarization, and US-China relations as probably larger than most people think. He said Iran obtaining nuclear weapons is a potential life-and-death threat to mankind that must be resolved regardless of economic cost, and argued that a strategy of economic tightening against Iran could resolve the threat without military deaths, even if gas prices rose for a year. He also said the Western world became dangerously over-reliant on potential adversaries for rare earths, semiconductors, active pharmaceutical ingredients, and energy, and that America lacked sufficient productive capacity to triple Patriot missile output when needed. In response, JPMorgan launched a security resilience initiative covering drones, cyber, space, AI, APIs, and semiconductors, rolled out first in the UK.

Dimon draws a sharp distinction between secure and insecure leaders. Insecure leaders surround themselves with loyalists, suppress bad news, and allow internal reporting to be shaped to look favorable. Secure leaders welcome criticism and treat customer complaints as gifts. He described his method of combating bureaucracy, complacency, and arrogance as requiring honest self-assessment, listening to customer complaints, visiting call centers, and conducting bus trips where branch staff are given beer and immunity to speak freely about problems. He has for twenty years insisted his board meet without him at every board meeting, and he presents dissenting views from colleagues directly to the board rather than filtering them. Managers who resist hearing negative feedback from lower-level employees are disqualified from leadership in his view.

Dimon says character is the highest criterion he uses when evaluating people, noting that J.P. Morgan founder John Pierpont Morgan held the same view. He does not believe his departure would cause a ten to twenty percent drop in JPMorgan's share price, and he expects his succession to be organized rather than sudden. Troy and Doug have been positioned as likely successors in a contingency scenario. The qualities he seeks in a successor are work ethic, openness, curiosity, trust, empathy, sufficient IQ, discipline, and grit, and he explicitly rejects the idea that specific technical skills such as AI should be the deciding criterion.

Dimon suffered an aortic dissection on March 5, 2020, and says he knew many people do not survive to reach the hospital. He describes the radiation and chemotherapy treatment for throat cancer as more painful than the heart surgery episode and says he had no major regrets when facing potential death during the aortic dissection. On career development, he argues that learning is achievable only through reading broadly and learning from people around you, citing George Will, David Brooks, and Tom Friedman as examples of reading across ideological lines, and calls developing emotional intelligence and empathy a critical leadership skill.