Jamie Dimon Sounds Alarm on Elevated Market Leverage

JPMorgan CEO Jamie Dimon has sounded the alarm on a potential market risk: elevated leverage. He told CNBC that 'market leverage is pretty high' and noted that this can lead to sudden disruptions.

Dimon made his comments after the recent South Korea market sell-off, where regulators tightened rules on single-stock leveraged ETFs following heightened volatility. The Kospi index closed 5% lower and is one-third lower than its record high hit in June.

The JPMorgan CEO also pointed to the turmoil at AI-focused hedge fund Situational Awareness, which lost 67% in July due to margin calls. Dimon emphasized that not all market leverage is formally classified as margin debt, but highlighted that 'margin debt is the highest it's ever been.'

While Dimon acknowledged the risk of sudden disruptions, he stopped short of predicting a broader market crisis, stating that 'it's high' but not 'systemically high or that it's going to cause a disaster'. His comments come as leveraged ETFs face growing scrutiny.