JPMorgan Chase CEO Jamie Dimon has warned that the conflict in Iran could trigger oil and commodity price shocks, keeping inflation high and pushing interest rates above current market expectations.
In his annual letter to shareholders, released a day after U.S. President Donald Trump threatened Iranian power plants and bridges if the Strait of Hormuz is not reopened, Dimon highlighted the growing impact of geopolitical tensions on the global economy.
The 70-year-old bank chief, who has led JPMorgan – the largest U.S. bank – for two decades, cited risks including the war in Ukraine, ongoing Middle East hostilities, and tensions with China as factors creating “significant” threats to economic stability.
Concerns over war-fuelled inflation have led markets to largely rule out interest rate cuts this year. In the UK, the Bank of England has kept its base rate at 3.75% following its latest Monetary Policy Committee meeting, maintaining borrowing costs amid an uncertain economic outlook.
Policymakers in March cited recent geopolitical tensions, including the situation in Iran, as a factor in market volatility and rising oil prices. The committee opted for a unanimous “wait and see” approach to assess the duration and impact of the conflict.
Earlier expectations for a potential rate cut – following a fall in inflation to 3% in January – have shifted. Economists now see further rate increases as possible if pressures on the economy persist.
Mortgage costs in the UK are already rising. Average fixed rates have increased over the past month, while the number of available mortgage products has fallen sharply, reflecting market expectations for further interest rate moves amid ongoing geopolitical uncertainty.
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