Dimon Warns Hidden Leverage Risks Fuel Market Volatility

JPMorgan CEO Jamie Dimon sounded a warning about hidden leverage risks in financial markets on Wednesday, saying that record-high margin debt and concealed borrowing in hedge funds and prime brokerages could trigger rapid volatility.

Speaking to CNBC's Leslie Picker, Dimon highlighted that significant borrowing is not reflected in official margin debt figures because it is concealed under other forms of credit within prime brokerages, hedge funds, ETFs, and Treasury arbitrage strategies.

The warning follows the recent collapse of AI-focused hedge fund Situational Awareness, which was forced to liquidate much of its public-equity holdings after leveraged technology investments backfired. JPMorgan Chase & Co. served as one of the main brokers for the fund.