Jamie Dimon, the Chief Executive Officer (CEO) of JPMorgan Chase, known as "the King of Wall Street," criticized U.S. President Donald Trump's tariff policy in an annual letter sent to shareholders. He said, "Tariffs can exacerbate inflation and may lead many to consider the possibility of a recession more seriously."
Earlier this year, Dimon supported Trump's tariff policy, suggesting he could tolerate some inflation if it helped boost manufacturing. However, as the scope and intensity of the tariffs turned out to be broader than expected, he began to express different opinions. It is unusual for Dimon to openly criticize the U.S. unified economic policy in his annual letter.
Concerns over inflation stemming from Trump's tariffs are also voiced domestically. Oh Geon-young, Director General of Shinhan Premier Pathfinder, noted about the tariff policy of Trump's second administration, "The tax rate is high and there are many targets," adding, "In terms of speed, while the first Trump administration waited a year before implementing them, it is now happening very quickly."
Director General Oh stated, "Some countries may retaliate with counter-tariffs, further exacerbating inflation," and analyzed that "this stimulation of inflation could hinder the Federal Reserve's cuts to key interest rates that have been in place since last year, and the support provided to the market through interest rate reductions could come to a halt."
As we are creatures of forgetfulness, we tend to quickly forget. Just a few years ago, the world suffered from high inflation. When prices continue to rise, central banks increase key interest rates to curb inflation. The rise in key interest rates leads to higher loan rates, which translates to deteriorating disposable income for citizens. With less disposable income, consumption declines, placing downward pressure on the economy. When consumption contracts, corporations' performance is also impacted negatively.
This is naturally a bad omen for the stock market. Investors should keep a close watch on how our government and major countries negotiate with the Trump administration in the coming period. President Trump announced on the 7th (local time) that he would immediately begin negotiations with countries other than China, which announced counter tariffs. Although unexpected setbacks may arise during the negotiation process, there is a sense of relief for now, perhaps because it follows a dramatic plunge in the market the day before.