02:01 PM EDT, 04/08/2024 (MT Newswires) -- The US could see "stickier" inflation and higher rates than projected, while the growing adoption of artificial intelligence is likely to have "extraordinary" consequences for businesses and the society overall, JPMorgan Chase ( JPM ) Chief Executive Jamie Dimon said in an annual shareholder letter published Monday.

Despite an improvement in inflation, there are ongoing concerns regarding "persistent" price pressures, Dimon wrote. The bank is considering various outcomes to manage interest-rate exposure and other business risks, he said.

"Equity values, by most measures, are at the high end of the valuation range, and credit spreads are extremely tight," Dimon said. Markets appear to be pricing in a 70% to 80% probability of a soft landing, though the odds are likely "a lot lower than that," he added. The company is prepared for interest rates ranging from 2% to 8% "or even more, with equally wide-ranging economic outcomes." Dimon said higher rates and a recession pose risks, not only for banks but for the entire economy.

The Federal Reserve has raised interest rates by 525 basis points since March 2022. "I remain more concerned about quantitative easing than most, and its reversal, which has never been done before at this scale," he said.

JPMorgan ( JPM ) continues to be cautious amid potential risks from ongoing wars in the Middle East and Ukraine, Dimon said.

JPMorgan's ( JPM ) team now includes more than 2,000 AI and machine learning experts and data scientists, according to Dimon. The company is exploring the potential that generative AI can unlock across various domains, especially in software engineering, customer service and operations, as well as in general employee productivity.

"Over time, we anticipate that our use of AI has the potential to augment virtually every job, as well as impact our workforce composition," Dimon wrote. "It may reduce certain job categories or roles, but it may create others as well."

Separately, Dimon and lead independent director Stephen Burke said in a letter to shareholders that the company sees Daniel Pinto as immediately ready to fulfill the CEO responsibilities "should the need arise in the near term," according to a filing with the US Securities and Exchange Commission. Pinto currently serves as the company's president and chief operating officer.

JPMorgan ( JPM ) and fellow banking heavyweights Wells Fargo ( WFC ) and Citigroup ( C ) are scheduled to report their first-quarter financial results Friday.

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