Jamie Dimon said he’s still more worried about inflation than markets appear to be.

The JPMorgan Chase & Co. chief executive officer said significant price pressures are still influencing the US economy and may mean interest rates will be higher for longer than many investors are expecting. Dimon cited costs linked to the green economy, re-militarization, infrastructure spending, trade disputes and large fiscal deficits.

“There are a lot of inflationary forces in front of us,” Dimon said in an interview on Bloomberg Television Thursday. “The underlying inflation may not go away the way people expect it to.”

The S&P 500 and Nasdaq 100 closed at record highs Wednesday amid optimism over monetary policy easing after a measure of underlying US inflation cooled in April for the first time in six months. Dimon said that markets have been healthy for a while, but that doesn’t necessarily predict the future.

“If you have higher rates and — God forbid — stagflation, you will see stress in real estate and leveraged companies, and private credit,” Dimon said.

“Stocks are very high, and I think the chance of inflation staying high or rates going up are higher than people think,” the CEO said. “My view is whatever the world is pricing in for a soft landing, I think it’s probably half of that. I think the chances of something going wrong are higher than people think.”

Dimon said that “a lot of happy talk” is why markets aren’t pricing these elements in.

Still, geopolitics could be the determining factor in steering the economy next year, according to the CEO.

Dimon has been warning for months that inflation could be stickier than many investors are predicting, and wrote in his annual letter to shareholders that his bank is prepared for interest rates ranging from 2% to 8% “or even more.”

JPMorgan has been boosting headcount and compensation at a time when many banks have been cutting back. The firm is coming off its sixth year of record revenue, but recent months are showing some signs of pressure.

The bank’s net interest income, a key source of revenue, ended a streak of seven record quarters. Dimon blamed deposit margin compression — tightening of profits between what the bank earns on loans and pays out on deposits — and lower deposit balances in the consumer business for the sequential decline.

This article was provided by Bloomberg News.