Jamie Dimon Sees Overlooked Risk to U.S. Amid War in Iran

Key Takeaways

• It’s unlikely that the war in Iran will cause “a major inflationary hit” in the U.S. unless the conflict results in a “prolonged” disruption of oil trade, said JPMorgan CEO Jamie Dimon on Monday.
• Dimon warned the U.S. strikes over the weekend could provoke retaliatory cyberattacks, a possibility he said his bank was prepared for.

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There could be fallout from U.S. strikes on Iran over the weekend, but not the kind that will impact the average American’s pocketbook, said JPMorgan Chase CEO Jamie Dimon on Monday.

“If it’s not prolonged, there’s not going to be a major inflationary hit,” said Dimon, in an appearance on CNBC Monday, of the risk war in Iran raises prices in America.

The inflationary risk stems from oil prices. Iran over the weekend warned ships against transiting the Strait of Hormuz, through which 20% of the world’s oil flows. Concerns that Iran will disrupt global oil supply by closing the strait and targeting energy infrastructure across the Middle East caused West Texas Intermediate futures to soar to an 8-month high on Monday.

Why This Is Important

Investors were already worried about resurgent inflation before the U.S. and Israel attacked Iran on Saturday, sparking a conflict that could disrupt global oil flows and drive up fuel costs. Most experts predict a spike in oil prices, like that seen Monday, will have little impact on consumer prices if short-lived.

“This right now will increase gas prices a little bit,” said Dimon of crude oil trading on Monday. “If it went on for a long time, that would be different.”

In an interview with The New York Times on Sunday, President Donald Trump said he initially expected the campaign to last “four to five weeks.” The president said in a video address the same day the U.S. operation “will continue until all of our objectives are achieved.”

Dimon said on Monday that, while the war may not aggravate inflation, there could still be consequences stateside. “You got to expect there’ll be cyberattacks or terrorist attacks, either here or around the world,” he said.

Dimon noted banks like JPMorgan Chase could be desirable targets for retaliatory cyberattacks. “I would consider that one of the highest risks banks bear,” he said. “We spend a lot of money protecting ourselves from cyber. We think it’s part of our job.”

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