Key keywords: Jamie Dimon, JPMorgan Chase, Iran war jitters, Wall Street, geopolitical risk, Middle East conflict, market volatility, US economic outlook, energy price risk, Federal Reserve rate cut expectations During JPMorgan Chase’s first-quarter 2024 earnings call on April 12, CEO Jamie Dimon issued an uncharacteristically blunt warning to Wall Street investors and financial institutions, urging them to stop downplaying the risk of a full-scale military conflict between Iran and Israel and its far-reaching ripple effects on global markets and the US economy. Dimon noted that most market participants are currently pricing the recent exchange of strikes between the two countries as a temporary, contained event, but this level of complacency could lead to catastrophic losses if tensions escalate further. Dimon emphasized that a full-blown Iran war would trigger immediate disruptions to global energy supplies, as the Middle East accounts for more than 30% of global crude oil exports, and the Strait of Hormuz, a critical shipping chokepoint controlled by Iran, handles 20% of the world’s oil trade. He estimated that in the worst-case scenario, Brent crude prices could surge above $150 per barrel, pushing global inflation back up by 1.5 to 2 percentage points within months. This would force the Federal Reserve to completely scrap its planned interest rate cuts for 2024, and could even lead to additional rate hikes to curb resurgent price growth, a scenario that almost no Wall Street analysts have incorporated into their current forecasts. The JPMorgan CEO also revealed that the bank has already run stress tests for a full Middle East conflict scenario, which includes a 15% correction in US equities, a 30% jump in global shipping costs, and widespread capital outflows from emerging markets. He called on other large financial institutions to conduct similar risk assessments immediately, and warned retail and institutional investors alike to avoid overexposure to high-risk assets such as unprofitable tech stocks and low-grade corporate debt, which would be hit the hardest in a market selloff triggered by the conflict. Dimon added that while he remains optimistic about the underlying strength of the US economy, geopolitical risk is now the single largest tail risk facing global markets, and ignoring Iran war jitters is one of the costliest mistakes market participants can make right now. His remarks came as the CBOE Volatility Index, Wall Street’s key fear gauge, jumped 18% in a single week following Iran’s first direct attack on Israeli territory, and gold prices hit a new all-time high as investors rushed to safe-haven assets.