'GET THIS MACHINE GOING': Jamie Dimon calls for a new American industrial buildout

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[00:00:03]Welcome back. Good Friday morning everyone. Thank you so much for joining us this morning. I'm Maria Barteromo and it is Friday, May 29th. We are coming to you live this morning from the Reagan National Economic Forum here in Seami Valley, California. It is 7:01 on the East Coast. Right now, time for the hot topic of the hour and that is all about the economy. I sat down with JP Morgan Chase CEO Jamie Diamond here in California. I got his take on the broad macro story. The Federal Reserve with Kevin Walsh now at the helm and JP Morgan's investment plans for some $40 billion that he says he could use for an acquisition. Watch.

[00:00:39]>> Jamie Diamond, great to see you. Thank you so much for sitting down with us.

[00:00:41]>> Yeah, thrilled to be here.

[00:00:42]>> Yeah. I want to get your take the largest bank. You've got so much exposure to the consumer and to housing as well as to commercial and business.

[00:00:51]How would you characterize the economy right now? Give us your sense of the macro story. Well, it's pretty good, which you all all your viewers know is that, you know, the economy is growing at 2%, unemployment's low, 3 4.3%. Wages not going up that much anymore. Uh corporate debt's not that high, consumer debts actually not that high. Uh you know, inflation is ticking up. That's not good. And you have a lot of stimulus. The one big beautiful bill, 300 billion of stimulus. The uh the additional spend AI is 300 billion of stimulus. Dereg, it's a form of good stimulus because it allows people to put their money to work in a better way. Um and so th those things are good and a lot of that and then but we have a huge deficit and and that's kind of stimulus that also ends up in corporate profits.

[00:01:29]So corporate profits you know are up huge this year. Um so you know people feeling good stock price are up that's all good >> and there may be negatives. I think the one that you can see a little bit is inflation going up.

[00:01:40]>> Yeah.

[00:01:40]>> Um >> have you seen inflation cutting into consumers ability to actually spend? Are they cutting into their savings?

[00:01:48]>> Yes. I think well you got to separate consumers into various segments for the high end it doesn't do anything and if you take the higher gas prices a dollar of gas is hundred billion dollars a year but of course it affects lower income folks much more and for them they have to cut back something else or do something so what has happened for some is they have cut savings and they still spend and you know and borrowing is going up just a little bit so it might be that it might not be sustainable forever and we don't know what's going on future gas prices so uh you do have a little bit of that >> and in terms of the big beautiful bill that you just mentioned, are you seeing companies increasingly use things like the expensing the the expensing uh options that were in that bill because you can write off so much right now?

[00:02:28]>> No, it's it's expensing options. It's the R&D credits. Uh it's it's a competitive t I think a reminder we need a competitive tax structure globally and this is competitive globally. And so that puts American companies in a position where they're going to invest here elsewhere. there's an incentive to do it here too or at least not a disincentive to do it here and an incentive to do it elsewhere. Before C taxes were cut, this happened in Trump's first term. You know, you you had huge sums of money going overseas and staying there because, you know, the returns were so much lower if you if you could do the exactly the same equivalent behavior. So, uh so that does matter.

[00:03:02]>> So, you feel good about where we are now in the economy even though inflation is ticking up.

[00:03:05]>> Yeah, I feel okay. I'm I'm a little more worried about those other people. I see, you know, it's not it's not their immediate cracks in the economy. It's the other things I worry about that has a long list of serious issues that are going to have to be dealt with. I don't know how they're going to affect the economy this year. You can't put them in a base forecast. They are large items. I always refer to them as tectonic plates moving around that may cause issues that we don't fully understand today.

[00:03:28]>> I mean, it's interesting because this market has been in a meltup, right? Look at these major averages since the end of March. Are you surprised to see things like the NASDAQ up 28% in the last two months, even in the face of two wars that we're watching play out?

[00:03:41]>> I'm not surprised other than in the face of two wars that they, you know, they don't seem to have derailed anything.

[00:03:46]But you and I have seen this before where you have these kind of meltups and you often go on longer than you think.

[00:03:52]So, you know, the person says that's too much. Well, maybe not because they can go on for a long time before something reverses them and you don't know what that is. You know, it could be sentiment. It could, you know, could be uh inflation. It could be higher rates.

[00:04:03]It could be business sentiment. You know, obviously consumer demand if it drops that, you know, a lot of companies will cut back inventory and uh the profits will drop and all that. So, it's always a confluence of events. Very hard to predict in the next 12 months what's going to happen. I and I actually think it's a huge intellectual error to say here's my base case. What I always look at is what's the range of outcomes. You could put probabilities of those outcomes. You know, my probabilities of a a worse outcome are higher than other people's and it's mostly around inflation driven by multiple factors.

[00:04:32]>> Yeah. I think the other day you made some news at the Bernstein conference.

[00:04:35]You said you were cautiously pessimistic.

[00:04:37]>> Yes, I know. I was jo I was kind of joking because everyone says cautiously optimistic.

[00:04:42]>> Okay. So cautiously pessimistic. The other thing you said which I thought was interesting is you you tend to buy back your stock all the time, but you said you're not fond of buying back the stock of JP Morgan at these levels.

[00:04:52]>> I have been very consistent. We are buying back the stock at these levels.

[00:04:56]Uh I prefer to buy them at lower levels.

[00:04:59]I prefer to help my existing shareholder, not my leaving shareholder.

[00:05:03]And we've always believed that investing in our company is better than buying back the stock. However, we have a lot of excess capital and you know the stock is you call equilibrium, but I I don't like equil I like to buy it when I think it's kind of cheap and it's a bargain.

[00:05:15]So Warren Buffett says the same thing and so do a lot of the people. Buying it automatically I think is just a intellectual fault. That's not that's not you should be buying it. If you if if stock price go from here to here, you buy more here and less here. And that's kind of what we do.

[00:05:28]>> It's the it's the most fundamental thing you learn on Wall Street. Buy low, sell high.

[00:05:33]>> Exactly. And then it takes judgment, what that is. And it's hard to fight the market. You know, the market says the stock's worth X. Well, it is probably.

[00:05:39]Yeah.

[00:05:39]>> But that doesn't mean I want to buy at that price. Particularly when I think I can use my capital. That's the other thing I I probably mentioned at the conference is that we have all this excess capital. Estimated about $40 billion. I believe now that we can deploy it in our businesses over time.

[00:05:53]It may take a couple years because of things like SRR(I) and that I'd rather do that. So if I had no other options and you know maybe it'd be more stock buyback.

[00:06:02]>> Yeah. You're talking about your security uh initiative and I'm going to get to that in a moment because you also said just as you were saying that JP Morgan is earning 20% as opposed to your target of 17% in terms of a return on tangible common equity. You said that you personally think that you're over earning. The entire industry is over.

[00:06:21]>> I didn't say I didn't say the industry.

[00:06:22]I said us it just means there when when you have our business always has high volumes that go high to low. Okay, credit losses that go high to low.

[00:06:30]Credit losses are kind of normalized.

[00:06:32]Volumes are quite high. Exuberance is quite high. Profits are made at the margin. The next trade is more profitable than the average rate. And people sometimes forget that. And so I have a little humility because look at what happens in in 120 company years between the last 10 years. How many companies earned over 17 in banking earned over 17%. It was like literally 8% of the time. So to think it's going to go on forever is a mistake. It's a competitive world. It's a capitalist world. As Jeff Bezos says, your margin is my opportunity. And I and I we have a lot of competition and they're coming and they're smart. You know, I I recognize that they've done very well and the base competition is quite good.

[00:07:10]They're all back. It's not like anyone's weak anymore and and you you see that in the numbers. So, uh I just think we should be a little cautious about bragging about our results. So, so trading volume is abnormally high right now.

[00:07:21]>> It's it is high and values are high. So, remember values values drive a lot of things. Custody, treasury, deposits, uh asset prices going up. And so, all these things drive a lot of things. And if you model it through, there's another side of that mountain sometimes. And I don't know when that's going to happen. I just think, you know, eventually something will happen and volumes will go down, there'll be a little recession, credit laws will go up and uh and we'll still be do fine. And I think actually that's when you perform. It's really important to perform in bad times, not just in good times.

[00:07:51]>> Now, I'm wondering if the Federal Reserve uh changes is going to be a catalyst for for for those changes.

[00:07:57]What's your take on Kevin Worsh and how he's going to approach his new job as chairman of the Fed?

[00:08:01]>> I I think the world of Kevin, he's quite experienced in this field in all fields.

[00:08:05]You know, uh he's been in the central bank before. He obviously knows global markets and I like I like what he says, which is, you know, the the Fed should focus more on the financial system and not so much regulatory. We he's right to say all these years rule after rule around the world. I mean Basel 3 has been 10 years in the making. So say is this is if we wanted what was the outcome? Can we make it better? I actually think you can make regulations simpler, less costly, get more loans out there and make the system better and safer. And I think that should be the goal. And so I hope they they do that.

[00:08:40]Uh and then you know rates I don't know he remember he's going to walk in a room with 12 other governors. And so he has his ideas. He's a smart guy, but he's got to give them time to think about it, do some research and all that. So, you know, it won't be immediately. He he can't decide by himself in day one what to do.

[00:08:54]>> Well, it's a very different backdrop than it was when he first was expected to take on the Fed. I mean, he was expected to cut rates. How do you cut rates with inflation where it is, >> right? And and he'll have to deal with that, too.

[00:09:05]>> And the market's expecting a hike in interest rates.

[00:09:07]>> I saw that.

[00:09:08]>> Are you?

[00:09:10]>> I think it's possible. I mean, I I don't know.

[00:09:12]I don't spend that much time guessing about stuff like that. If if you ask me, I can give you all the analysis around why it might go up and why it might go down. I can give you probabilities. I don't know. And and you but we are prepared for higher rates too and higher credit spreads. We have not seen in a long time as people get a little more credit conscious, which I expect to happen.

[00:09:30]>> Now, one thing that Kevin Walsh did say was that he wants to make the Fed's balance sheet smaller, shrink the balance sheet.

[00:09:37]>> What does that mean for JP Morgan, though? I mean, what does that mean for a bank like yours, which you've got to keep money at the Federal Reserve?

[00:09:43]>> Well, but that we keep money at these things because of regulations and requirements, liquidity rules. So, I think he's right. The Fed shouldn't have to intervene every single time there's a kathuffle in the markets. It's a mistake. It's a is a policy error that somehow we got to make everyone comfortable, but to do it, he's got to change some of those regulations and the, you know, the LCR and SLR and certain GCF rules to give banks more flexibility. But the important thing is it's not to deregulate to make it easier for banks to make a lot of money and then go bankrupt. It's to I think you can do it and make the system safer. And I think Kevin's quite bright. He probably knows that. And it's going to take a little bit of analysis. We've got a lot of reports to the Fed about how that can be done. I think Secretary Bess has actually spoken about it, you know, to do that. We we have to change some of these requirements. But the banks have so much capital and so much liquidity.

[00:10:28]It's a good question to say you can never use it again in your life. And for us, it's a trillion 1.2 2 trillion of basic cash in treasuries can never use for productive purposes other than safety, which is a good one. But I think we could do it much differently and have more safety and and then we can intermediate more more actively in the markets as opposed to the Fed having to intermediate when the time comes. So >> and Mickey Bowman has been working on this and has >> I I she is on top of all these issues.

[00:10:53]Yes.

[00:10:54]>> Jamie, let me get back to something you just said and that's the $40 billion.

[00:10:57]>> Just so you know, a lot of banks are lending a lot more today. So there's they're doing it in anticipation of some of these changes.

[00:11:03]And is that what JP Morgan is doing >> a little bit? Yeah.

[00:11:06]>> And and where is the lending specifically? Would you say is the bulk of the lending?

[00:11:09]>> I think you know if you I was just reading some reports flying out here.

[00:11:12]Some will say commercial banking, some will say you know markets related financing issues, balance sheet issues.

[00:11:18]Remember the needs of all these global investors are huge. So you know banks constrain themselves sometimes like even provide repo because of some of these rules. So I think it's literally across the board.

[00:11:27]>> Does it does it uh indicate where we are in the macro economy based on where the lending is? No, but but lending creates money. Okay. So when the Fed buys securities, it creates money and when banks lend, it kind of creates money. So it's kind of a a bullish thing which is happening right now.

[00:11:43]>> Jamie, you just talked about this $40 billion in capital. You said that at the Bernstein conference as well and you said that that money could be used as an acquisition for an acquisition. What are you considering?

[00:11:52]>> I'm shocked that people think that's shocking. I didn't have I don't have anything in mind. I'm simply saying yes, of course it could be used for that if it makes sense. if if it if if we did one, I'd explain to the shareholders why we're doing this, why it makes sense. It will make sense. It won't be some, you know, something that'll surprise people in a terrible way. And so, uh, and of course, I I'll remind people, I'd rather in we invest organically. So, it's quite clear, organic growth is the best kind of growth. It's your people, it's your culture, it's your systems, it's your tech. You're not taking on whole new different things. You know, mergers are can be very tough and we're quite conscious of that. So, it doesn't mean we won't do them. And there may be a small, we've done a lot of small ones, by the way, that you don't even know about. You know, first Republic is $300 billion of assets. You know, that I don't know how you'd measure that, but that was a massive acquisition.

[00:12:34]>> That's a massive acquisition by any standard. But look, we know you can't buy another deposit institution in the United States, right? You're at the limit. Correct. In terms of deposits.

[00:12:42]So, do you want to buy a tech company?

[00:12:43]Are you going to buy fintech? What are you thinking about?

[00:12:45]>> We we look at everything, you know, just to be smarter. And, you know, a lot of these fintech have done a great job. Uh it it doesn't seem to me like that's the likely outcome, but it's possible that someone's going to come. You know, I always say to myself, I don't care what I think. I want you to tell me what you think. And if you come up with say that's a great idea, we'd consider buying something.

[00:13:01]>> What about wealth management?

[00:13:03]>> Yeah, that that could make sense, too.

[00:13:05]Yeah.

[00:13:06]>> I see.

[00:13:06]>> But but in every area, we can do it organically. So, you're always going to compare it to an organic possibility.

[00:13:12]Some people, they're not in that position. They can't do it organically.

[00:13:15]They have to buy it. I think we have the luxury of saying, "No, I can build it, too." Let me ask you about that because you you mentioned the security and resiliency initiative and you talk about investing uh in items and industries that are central to the US economy to defense. I know you've also taken this internationally. You're going to go to the UK and and talk about doing it elsewhere. But what specifically have you identified in terms of security and resiliency uh potential investments?

[00:13:43]Yeah. So, you know, the the first thing which I know your viewers know is that America is still the beacon of light in the hill is still the arsenal of democracy, the bastion of freedom. I'm quite patriotic in that and that this country provides safety to the whole world was and it wasn't just our allies.

[00:13:58]It actually provides safety to India, you know, people who are not allied nations, United States of America. And I think the most important thing is we have the strongest military in the world underpinned by the strongest economy in the world. And if you ask me about the dollar dominance, it's depend on those two things. If those two things disappear, so will dollar dominance one day. That may take 30 years. But um so that that was the first thing. But but we we didn't identify it ourselves. It's kind of been identified by the military itself, by the administration, by others about we don't we rely on outside parties for rare earths. We should have been self-reliant or at least friendly reliant or neighborly or something like that. That was true for active pharmaceutical ingredients and the ingredients that go into the drugs that people take you know mostly come out of China and India and and and then there are things we do in manufacturing that we should have done here and we didn't keep productive capability to build more bombs and and missiles and so we can't double production and so all these things like and the people know it now we got to go do it. So this was our effort to say you know instead of complaining about it what are we going to do and so we looked at what we already do and then we said we're going to do 50% more uh that's the 1.5 trillion over 10 years it's been outstanding I mean we've been in contact with thousands of companies we've we've already Todd Combmes came in and done a great we've already invested two billion directly in companies um we're going to beat this 1.5 trillion I'm pretty sure but we've learned a lot in the process importantly and this might be interesting to your viewers we've done research around the ship building ecosystem we're doing around the drone eosystem system. We did it around the API ecosystem, around the rare earthy ecosystem. And that teaches you what policy should be. And then we're going to promote policy to, you know, here's how we can keep productive capability, you know, ready to go for another commercial use. But if you need it for military purge, you push a button, the other stuff goes out. And you can do that for ship building, you can do that for missiles, you can do it for a lot of different things. And so it's been a great effort. We're learning a lot. We have a lot of partners, a great advisory board. And as you pointed out, we're going to roll it out to allied nations, which is UK, France, Germany, Italy, Poland, Australia, Japan, Korea, Canada.

[00:15:56]>> And so you're going to be looking to invest in things like drone companies, ship building in those economies as well.

[00:16:01]>> Yes. And this is normal commercial business. So it's not we may do some venture capital type of stuff, but it's mostly just helping companies grow and expand like we do in middle market corporate banking and investment banking. Why did it take so long for corporate America to understand that the supply chains and and by the way um elected officials uh Congress and the White House? How come it's taken so long to understand that we can't have other countries particularly adversaries making our stuff? That's important.

[00:16:25]>> We should have we should have 15 years ago, right?

[00:16:28]>> The military, the government and business should have said we need to run things that are needed for national security and resiliency the same way companies do. We've got backups for almost everything. And we didn't. Now you and I can cry over spilled milk, but my view is admit it, acknowledge the problem, roll up your sleeves, get to work. And that's what this is. And you have it. I mean, you have a huge amount of companies, a lot of other people doing this, not just us. We're just a small part of this. You have the military's behind the, you know, getting this thing right. They burn Steven Fineberg who's doing a great job at that. They've got uh Bessins working on some of these things. So we're it's fully engaged. You got to read the book Freedom Forge. How the America got fully engaged after Pearl Harbor. Like we went from building almost nothing, no ships, no tanks, no aircraft to we built 144 aircraft carriers in four years. There was no car produced in America from 1943 to 1945.

[00:17:19]>> Wow.

[00:17:20]>> All those plans, all of them. And not just GM and Ford. All those plants were building bombers, fighters, tanks, jeeps, ships. We went from building a Liberty ship in one year to two days.

[00:17:33]And so it's just we just got to get this machine going. and hopefully this will get it done fast enough.

[00:17:37]>> Well, you've always been a patriot, Jamie, and I love that about you. Let me get your take on what you're seeing around the world. Uh given um what the effort is in the United States, you're just back from China. The president obviously had his own trip to China, but what did you do in China? What can you tell us about u what you're doing in China?

[00:17:53]>> Yeah. Well, you want about the world, you want about China?

[00:17:55]>> China.

[00:17:56]>> So, we we we've been in China for a long time and we have exposure. We have China, we got Hong Kong, got Taiwan. I went, by the way, from Shanghai to Taiwan. you did.

[00:18:05]>> I had to stop at Okinawa because you're not allowed to go direct. Uh so, you know, we have a lot of clients in Taiwan, too. So, we we've had a China conference for years, the 3,000 investors from around the world. When we bank people in China, we bank some Chinese companies, only those that were allowed to by the United States government or the European government.

[00:18:21]So, you know, we follow the rules that we're supposed to. Uh but but we also we also bank something like I I forgot the number. I'm going to say 2,000 multinationals in China. So, we probably bank Fox in China. We probably bank everyone else in China and we want to and you want us to and you know all these companies we bank want us to and we all follow the laws of the United States which they've gotten very tough and they should you know sanctions you know what could be sold there what could be sold here etc. Um and it makes you smarter so I believe what the government's doing is the right thing full engagement full engagement but do things your own self-interest when it comes to security and I think we're actually doing that and so um uh and and there's more to do. I mean, we haven't quite gotten there in a bunch of these things, but there's and there's more to do. But we we'll be okay and we just got to move quickly.

[00:19:06]>> But it's about >> the other thing I'd say very important when I look at the what we need to do.

[00:19:11]We need to maintain the strongest military in the world, the strongest economy in the world. And that a lot of that's us doing a better job. It's not about potential adversaries. we could do a hell of a lot better job in our own business, our own economies, our own growth, our own standards, you know, teaching people about civic responsibility in this country that people, you know, billions of people would come here if you opened up the borders, you know, billions of people.

[00:19:33]And we're not teaching our own kids that this the I would tell you the constitution is a legal embodiment of values. Those values are principles.

[00:19:41]Life, liberty, and the pursuit of happiness, freedom of speech, freedom of enterprise, country, God. That's what it's about. And we don't teach that anymore. And those values are why that those values of freedom are everything.

[00:19:52]They're more they're more powerful than anything in the world. And you know, we've done a terrible job making that part of our school system. And and I put the work ethic in there. Yes. I I would It's a good thing to work.

[00:20:03]>> You know, you've been working for a long time >> and work hard and and but try to do well. Treat people well. And so uh so it's all kind of one big bundle of getting this stuff right.

[00:20:12]>> But in terms of China, and I asked President Trump this as well. I mean it's a balance to walk because here we have an adversary that is surveilling the country right surveillance um breaching our networks right I mean you know cyber activity and then you just go and you sit down with Xi Jinping and you have a conversation like your like your buddies meanwhile you know that they're and and he said to me well they're doing it to us and we're doing it to them I mean how do you walk that balance >> well that's not my job I understand your point >> but are they surveilling the company >> I probably and I but the and the president knows a hell of a lot more about what's actually going on than I do and So you know when the government tells do something we salute but we're quite conscious of that. I do think we need to do a lot more but you know he has to deal with China the way they are and there's still a lot of trade with it and the China but also like America like one of the things I think it's important we keep our military allies and our economic allies and I and I think more than just a little I think it's like geopolitically brilliant and and so to me if we do that well that's a great thing and we should be conscious that's the best way to counter adversaries is that keep your you keep yourself very strong and so uh I understand your point and I don't know private convers they'd had and he probably not going to tell you either.

[00:21:23]>> And we've got part two of my interview with JP Morgan Chase CEO Jamie Diamond coming up in the 8 a.m. hour and a lot more of that interview all morning long.

[00:21:37]Welcome back. Good Friday morning everyone. Thank you so much for joining us this morning. I'm Maria Barter Romo and it is Friday, May 29th. We are coming to you live from the Reagan National Economic Forum this morning in Seami Valley, California. It is 8:03 on the East Coast and we kick it off with the hot topic of the hour. JP Morgan Chase chairman and CEO Jamie Diamond here at the forum. Now, part two of my special interview with the chairman and how he feels about the Clarity Act, the future of AI and banking, and his recent meeting with New York City Mayor Zoran Mandani. Plus, he gave us advice for the 2026 graduates on achieving the American dream.

[00:22:14]Let me get your take on how your business is and changes and changing and how the whole industry is changing with regard to digital assets. We've had on Coinbase CEO a lot and I know that he wants to be able to pay rewards and he wants people to put you know uh money in crypto platforms like his and and the banks are worried that it's going to mean people are taking money out of their deposit accounts. How do you see the Clarity Act changing things?

[00:22:36]>> Let me just rephrase it. We're not worried. We think it should just be fair. If he takes deposits like a bank, he should have bank rules. We have social requirements, litig legal liquidity requirements, capital requirements, AML requirements, financial reporting requirements, transparency requirements. If he wants to be a bank, be a bank. That's all it is. And the second issue, not really related to rewards and interest, interest on stable coins, is also about uh AML, BSA, KYC. Because when you earn a bank system, it's already been through all that. Okay? And we do that because we're we have to for the federal government. And so if they want to be moving money around the world on any basis, you should ask the question, can that be used illegitimately easily? And the answer would be yes, unless you they follow the same rules, >> right? They're not FDIC insured.

[00:23:20]>> And they're not FDIC insured. We have requirements to build branches in lower income neighborhoods. You know, we have liquidity requirements and capital requirements, reporting requirements. We have like 84 regulators all over us. Uh we're just saying it should be fair and equal, period. Not that they can't do what they want to do. You know, if you want to buy cryptocurrency, be my guest.

[00:23:39]You know, I believe it's a free country and and I and I defend that, right? But um but we just wanted to be fair.

[00:23:45]>> But is that who you were talking about when you said there's a lot of competition out there?

[00:23:48]>> No, no, no. I was talking about uh Revolute and Stripe and Chime and Dave and SoFi and and you know, some of these companies, PayPal, they've done a great job in the past. There there are companies that are doing things in small business which are really interesting.

[00:24:03]you know, Capital One just bought one called Brex, you know, and there are hundreds of them and these are smart people trying to, you know, take a slice of your business or a bigger piece of your business and uh Citadel has done a great job in trading. And so when I look at these things, I'm saying let's let's but I tell my own people, open your eyes. Look what they did. We didn't do it and some we could have and some we couldn't have for a whole bunch of different reasons. Stable coins might be among that list. I'm not that worried about stable coin and we already have the JP Morgan deposit coin. Like if you're a wholesale, if you're a company and I send you the Jade War stable coin, you know what you're gonna say to me?

[00:24:36]Just give me my money. I'll put in what I want. And remember, you have to buy the stable coin and sell the stable coin. So the transaction costs on both sides. There's a lot of there is movement of money risk and stable coin.

[00:24:47]So it's not as simple as people think. I do think it'll be used for crossber payments, for small dollar payments, uh you know, for persontoerson type thing.

[00:24:55]But even person to person, if I send money to someone in the Philippines, I have requirements about who's sending it and who it's being sent to. And so you have to and you know if you want that money to be sent free because remember once that money is in a wallet overseas, it could be in anyone's wallet and that goes to a third wallet, a fourth wallet.

[00:25:11]So the first one may be legitimate, second one may be a sex trafficker. So you know this it's complicated and the government needs to do it thoughtfully.

[00:25:18]If they don't do it thoughtfully, it will cause it'll be a huge problem.

[00:25:21]>> So are you happy with the way the Clarity Act is turning out?

[00:25:24]>> No.

[00:25:25]No, because it it it it allows them to effectively pay interest on deposits, stable coins or something like that without the protection that they should have. And it doesn't do anything for MLBSA. It has almost no legal protections. So, no, it's the banks will not accept it that way.

[00:25:40]>> They won't.

[00:25:41]>> And the ABA, the small banks, the credit unions, it's not just the big guys. I'm not worried about stable coin, but if it happened, I'm telling you, I would have nothing to do with it and it would eventually blow up on its own. Okay? But that's my personal thing. But I do understand the concern of all the other banks. So, >> well, the markup is coming. I mean, what are you going to do about it?

[00:25:58]>> It is. We'll fight it. If we lose, we lose and we'll live.

[00:26:01]>> Yeah. Okay.

[00:26:01]>> But it will be fought. This will not be No, no one's going to bow down to this guy, okay? Or that company. And but he's the only one. And he's spending hundreds of millions of dollars in Washington this thing.

[00:26:12]>> He said he's he's representing the whole >> He's full of >> Well, um we're gonna watch that one.

[00:26:19]>> Yeah.

[00:26:20]>> Wow. Well, I mean, this is turning into a big fight between the whole, you know, each industry and and and you're talking about blockchain and and and getting blockchain out, >> but we do blockchain.

[00:26:28]>> You've been doing that for a long time.

[00:26:29]>> We have connectors. We have J. We're going to do it. I think it's a legitimate technology. I think stable coin can be a legitimate payment system.

[00:26:37]>> Okay.

[00:26:37]>> Um, let me get your take on AI, Jamie.

[00:26:40]There's some fear out there about AI, and I know that you were in the meeting with Scott Bessant. Scott Basset, the Treasury Secretary, is worried or or or I think is suggested that he's worried that um the banks uh are able to put the patches up before the bad bad actors can use AI against us and say, "Oh, how do you hack a person's bank account?" What are you doing in terms of putting the guardrails in place around AI and this agentic AI so that they don't have these agents um acting unpredictably?

[00:27:09]>> Yeah. So the first of all big picture is technology is always changed the world and made it more productive. It's why we have so much productivity in this nation and I do think I will cause huge productivity and it'll cure cancers.

[00:27:20]It'll come up composite materials. It'll reduce deaths on roads. It it's it will be wonderful. But now you have that one issue about mitos came out and it it is so powerful. It can see vulnerabilities in your own code or own applications open source which is you know hundreds of thousands third parties and it's a legitimate concern. And I think they anthropic did the right thing to kind of give it to the government and give it to some of our companies to test it and find out what it is and how we can handle it. Now you raised one of the big issues the patching side and you can't in the old days you know for open source people now there's a flaw here they it'd be public uh and you'd have a week or two to fix it. Now you're talking about you need hours because once the uh the adversary sees that they can reverse engineer and go directly into the vulnerability that was just identified.

[00:28:05]So we have to we have to build things like utilities. I think Scott Besson is running the whole part of this effort at least the financial services part the banks all working together. We're talking hundreds of people are working around the clock to figure this out and what could be done. But I do think there's going to be a big part for the government role to play because not just our industry it's it's water it's utilities. It's telecom. You know it's it's manufacturing because you know if you take down if you it's ransomware. We had $20 billion of ransomware last year but I can see that number skyrocketing.

[00:28:34]So, we have to be very thoughtful how we do this and we have to help all the small companies. So, you know, a lot of smaller banks are like, you know, this is not fair. You guys are looking at it uh and we don't want it to look like you're strong and we're weak. And I totally agree with them. So, we have to figure out how to help everybody in this and uh and as we expand it to expand it safely. If you give Mythos to a company and they give it to a thousand people as opposed to a very select group of people, you're putting, you know, kind of very powerful weapons in the hands of maybe someone who wants to hurt your company like the insider threat type thing. So, we got to be very thoughtful.

[00:29:05]We've learned a lot in the process.

[00:29:06]There's still a lot to do. I >> I agree. And I think that the White House and and Congress is working on this morning, noon, and night because we realize that now because of the anthropic breach that we saw, um AI can actually work against humanity even though there are a lot of positives here.

[00:29:21]>> It's not working against humanity. So, it could be used by bad guys to do a lot of bad things, you know, and like I said, it could be the individual guy. It could be one person has the has at the fingertips a very powerful weapon that you know if they don't like a bank or an oil company refinery or a television company they can do huge damage and so we got to get smart I think we're going to need like a mini Manhattan project in this one I don't think this settles itself by by us just doing this kind of stuff >> at the same time you've been using AI tell us about the use cases that you've used within JPM >> and we've used it since 20 first time we ever used it 2012 yeah like people think it's new it's not that you when it was and of course it's gotten much more powerful than that but think of risk fraud under marketing prospecting note takingaking coming up with questions like this uh idea generation uh uh resolving errors you know building agents who can do things that people can't do we can read 100 thousand documents you know in seconds that unbelievable if you ask like how many contracts have this clause in it uh it's just powerful stuff it'll make a lot of people more productive you know it makes uh people you can wake up in the morning could tell you what you need to do or what happened overnight that isn't in this thing and so you know it's going to do a lot of things and it's early I mean these and these new models are just far more powerful than the ones we had a year ago >> so do you think that that will replace jobs >> yeah look it's a big issue and I my view of this is it will create a lot of jobs it may replace jobs all technology has done that we had 40 million people working in farms and now we have a million and a half okay we're a far more productive society those people went to cities and specialized in something else. That's why we have productivity.

[00:31:00]So I think in the big run it's a plus.

[00:31:02]It'll make America more productive, America wealthier, it may cause job loss for faster than it should. And you we need to plan for that a little bit. So my view is don't panic over it. Take take a deep breath and have a plan in place. So the government for example, every local every community has community colleges and local unions trained people in the trades and but and every community has different needs.

[00:31:25]Every school should be teaching people skills they need. Actually, today there are eight million jobs open today that can't be filled because they don't have people can do them. So, if we do that, we'll have a system in place that can adjust much more quickly.

[00:31:37]>> Yeah.

[00:31:37]>> The system, you know, the our system always adjusted, but it had a little more time. And so, uh, instead of panicking, let's let's take some actions that we that that are no regret actions that cost no money that we should be doing anyway. That's that would be my view of it.

[00:31:49]>> Well, it's coming at us fast. There's no doubt about it. Jamie, I want to get your take on housing. you launched this American dream initiative um back in March and you're trying to help expand opportunity in terms of housing and getting Americans able to take out a mortgage. Tell us about that.

[00:32:03]>> Yeah, so this is another one that came out of like what can we do and it's also a deep recognition. There's part of our society is not doing well. You know, it's the think of the bottom 20% 30% of the income scales and you know they're the ones who have their jobs wages did not go up for 20 or 30 years. There's more crime in their h neighborhoods.

[00:32:20]more the schools are filling their kids and it's a recognition that you're not going to solve all of America's problems until we attack that. That by the way, you know, Democrats and Republicans know we still haven't fixed it with all this policies and all this money and we still haven't fixed it. It's almost the same that it was obviously lives are actually better, but it's almost the same was years ago. And so, we just want to say, okay, the American dream is important to have a cohesive America of people where people actually feel opportunity. And you read all the time that people say it's unfair. I don't have opportunity.

[00:32:49]So, that's what that is. It's housing, it's small businesses, it's financial education, it's we call them vital institutions. So, it's financing local schools, hospitals, uh, roads, infrastructure, things like that. Um, so, and very importantly, it's the skill side. So, we're going to double down. We did the same thing. Okay, we already do it. We're good at it, but let's let's double down. And so, you mentioned small business where we went from we're going to go from financing seven for financing seven >> seven million. You serve seven million today >> 10 million >> and we'll get it done. you know, at least we're going to try and so and we one of the largest affordable housing uh companies in the country. There a couple few bigger, but we're going to try to double that in five years and you know, and and as we do that, do policy. A lot of what holds back housing is policy.

[00:33:33]It's, you know, it's bad local policy or state policy or sometimes federal policy that needs to be changed.

[00:33:38]>> Well, one of wasn't one of the big issues the fact that we didn't have enough supply of housing out.

[00:33:42]>> Yes, but that's policy. They can't get the land. They can't build a second floor. You can't build a second uh uh you can't build a single f single family thing in that plot. You have to have two stairways when they only need one. I mean it I can go on and on. You know then the studies show that in California it cost 40% more to build affordable housing and you know and other state and some states have got it right. So there are lessons to be learned. I think we could reduce the cost of mortgages by 50 basis points by changing regulations around securization origination and servicing that were so excessive they increase the cost for no good reason and they didn't really reduce risk. So I think we do that and not change the risk profile and it would make afford mortgages much more affordable at the $150,000 range and that's a big deal because those people want to buy a home. It's to start a home and when they buy a home where do they leave? they leave a rental. So, it actually creates more rental units. So, it's deflationary in my opinion. And and I've been begging the government to change this for 10 or 15 years, and we still haven't done it.

[00:34:42]>> Well, what I've learned is everything is about policy, right? I mean, look at the policy in New York right now and in California. You've got people leaving California because of this potential billionaires tax. What do you want to say about Mandani in New York?

[00:34:54]>> I think I think good the other good policy is free. I feel like telling the politicians, don't don't try to raise more taxes or spend more money. Sit down and fix policy. And I think you can grow 1% faster. I I literally believe that.

[00:35:05]And you and the p the public knows you can't get certificate of occupancy. You can't get roads built. The bridges the Baltimore bridge was supposed to be built by now is another five. I go on and on and on.

[00:35:17]>> You've been talking about this for so long.

[00:35:19]>> It's frustrating. It hurts. It's embarrassing. And it always hurts the the civilians of our country. And so uh so I had a great meeting with Madam meaning it was pleasant. Uh you know, but I said everything I wanted to say.

[00:35:30]you did >> about what America does about what JP Morgan does about my grandparents came here for the same reason his parents came here to be part of this country.

[00:35:38]They were Greek immigrants who never finished a little bit Italian by the way who never finished high school. uh what we do for affordable housing for medical for wellness for that we that we bank schools cities states hospitals countries and we and yes we make mistakes and there were good part I went through cities have to compete which he had read my chairman's letter and I said the competition you know there's taxes there's there's individual taxes corporate taxes there's real estate taxes uh there are other hidden taxes and there then there's quality of life which has nothing to do with ideology it's like crime police sanitation hospitals And you know, I want him to succeed and that and I said somewhere that I want him to succeed and we'll see what he does >> and and I my opinion was made he was very polite. It was very earnest. We had a very good conversation but I said everything I wanted to say and so then the press comes down right the headline.

[00:36:28]I wasn't avoiding anything. I mean but it was that's what I should do is and he said what he wanted to say and I got told about affordable housing and child care. Most people want it. If you do it badly it will be a disaster. It the thing is do it right. There's studies that could tell you how to do it right.

[00:36:42]Get people who know what they're doing and implement proper policies and um uh so we'll look we'll see. And I look I've seen and I said this too. I've seen mayors grow into the job. I mean he's running a city of 300,000 employees now.

[00:36:57]He's never had a job like that. I've seen mayors who just they fail businessly because they they can't administer themselves out of a paper bag or they or ideology blinds them to practical realistic real world policy.

[00:37:10]And so we'll see. And you know, if I can help them do the good stuff, I'd be happy to do that.

[00:37:14]>> Yeah, but Jamie, give me a break. He did a video in front of Ken Griffin's house.

[00:37:17]I mean, you know, that's a security issue.

[00:37:20]>> I agree that I my guess is he probably regrets that, but you got to ask him that.

[00:37:24]>> Yeah. Okay. Before we end, it's graduation season and you got today's graduates really worried. They see you, this incredibly successful person who came from nothing. Like you just said, your your grandparents came um from Greece into America and you hit it big and they don't know what is going to happen because of AI, losing jobs. They don't know if they're going to have the opportunities. What's your advice to today's 2026 graduates?

[00:37:48]>> How they going to get a job?

[00:37:49]>> I I think I I think they're going to do great. Okay. particularly inherit this plan that was built for them just like I inherited this stuff my parents did and my grandparents came with nothing so the the notion that we don't have this unbelievable country the our system morphs it will create jobs learn how to think learn how to earn respect have EQ learn how to communicate learn to have a heart have empathy all that you'll have a great life >> well how did you learn and the >> how did you learn all of that >> well I I would go back to my parents and you know maybe heritage have a purpose in life like life liberty and the pursuit of happiness the pursuit of happiness or happiness the way people talk about today it was purpose have a purpose in life that you pursue like and for some you know for Thomas Jefferson it was farming for Alexander Hamilton it was banking and manufacturing you know and for others is teaching for some it's being a reporter have a purpose in life treat everyone well like everyone who walks this planet like and don't you know fight the bullies if you can uh uh do the best you can make the world a better place that's it that's all I ever wanted to do and but I but work. I mean, I've my parents, you know, you you work.

[00:38:55]You earn you got I got to earn it every day.

[00:38:57]>> Work hard.

[00:38:57]>> I tell people the notion that somehow I go and I can coast. I can't.

[00:39:01]>> No, you can't. That's right.

[00:39:02]>> And and here we are ahead of the 250th anniversary of America. And it's almost uh what 230 plus years for JP Morgan.

[00:39:09]You were one of the first companies to trade on the New York Stock Exchange.

[00:39:12]>> 227 years. Alexander Hamilton was one of the founders as was Aaron Burr. In fact, we have the pistols on. You should come to our floor to house all these flags.

[00:39:20]We have a flag from the USS Constitution. We have a flag, a couple flags from Omaha Beach and one from the top of uh Pontah Hawk, one of the twos on the top of Pontah Hawk, June 6th, 1944, right after the Rangers took it.

[00:39:32]>> And and it is we hadundred veterans there last night and there a lot of tears in the room. We have them from the Vietnam War, Korea, George Patton's pennant, uh uh Apollo missions and you will be very just walking around. It's very touching. People should understand this country that what it created for people whatever it flaws and we can always look at them and improve upon them but they better learn what it did because and if they don't like it let let them go visit some of these other countries they'll learn the hard way.

[00:39:59]>> Absolutely. Jamie, thank you for sitting down with us today. Yeah.

[00:40:01]>> Thank you.

[00:40:02]>> Great to see you Jamie Diamond. We'll be right back.