Jamie Dimon, CEO of JPMorgan Chase, delivered a candid warning at the Barclays Global Financial Services Conference on Monday, cautioning that the current “booming environment” in the US economy may not be sustainable in the long run.

“We’ve been spending money like drunken sailors around the world; this war in Ukraine is still going on. Those are really big ‘buts,'” he said. “To say the consumer is strong today, meaning you are going to have a booming environment for years, is a huge mistake.”

He highlighted several key factors that pose significant headwinds to the economy, including geopolitical tensions, expansive government spending, and central banks’ tightening of monetary policy worldwide.

While some economists have recently contemplated the possibility of a “soft landing” due to declining inflation and a resilient labor market, Dimon remains skeptical about the longevity of the current economic prosperity. He cited worries about the Federal Reserve’s quantitative tightening campaign, the growing dependence on fiscal deficits, and the downstream effects of the Inflation Reduction Act, global remilitarization, and the shift towards a greener economy.

Dimon emphasized the lag effect associated with tighter monetary policy, making it unclear precisely when higher interest rates will begin to impact the economy. During the question-and-answer session, he noted the potential for substantial shifts in business results within a year, stating, “Businesses feel pretty good because they look at their current results; they’re not so bad. But those things change. And we don’t know what the full effect of all these things are going to be 12 or 18 months from now.”

Over the past year, the Federal Reserve has aggressively raised interest rates, with 11 rate hikes to curb inflation. In just one year, interest rates surged from near-zero to above 5%, marking the swiftest pace of tightening since the 1980s. While officials have hinted at the possibility of further rate hikes, they have signaled that these actions will depend on substantial evidence of a sustained reduction in high inflation.

The next meeting of the Federal Reserve is scheduled for September 19-20, and it is widely anticipated that rates will be maintained at their current 22-year high.

Jamie Dimon’s sobering remarks serve as a reminder that despite the current economic euphoria, challenges and uncertainties lie ahead. The financial world will closely watch the Federal Reserve’s upcoming decisions for clues about the path forward.