JPMorgan Prepares for Recession as Combined Trading Revenue Soars 50% to $45B
JPM•JPMorgan CEO Jamie Dimon warned the next credit cycle will be “worse than people expect,” citing weakening underwriting standards and opaque private credit markets. In 1Q26 major banks’ combined trading revenue rose to $45 billion from $30 billion in 4Q25 while wealth management fees grew over 12%.
1. Credit Cycle Warning
Jamie Dimon warned in a recent shareholder letter that the next credit cycle will be worse than people expect, attributing the outlook to weakening credit standards across consumer and corporate lending and the lack of transparency in private credit instruments.
2. Trading and Wealth Management Gains
Major U.S. banks reported combined trading revenue of $45 billion in 1Q26, up from $30 billion in 4Q25 and under $40 billion in 1Q25, while wealth management divisions across big banks delivered over 12% revenue growth, exemplified by a $4.2 billion quarter at one institution.
3. Recession Preparation Measures
JPMorgan is bolstering its reserves and stress-testing portfolios for scenarios of prolonged high rates, stagflation and widening credit spreads, with leadership emphasizing disciplined underwriting and enhanced capital buffers.
