JPMorgan Chase CEO Jamie Dimon had a dose of reality for analysts and investors tuning into his company’s earnings call this week: At some point, governments around the globe are going to have to examine their spending habits.
Shares in America’s largest bank declined following its Q4 2025 earnings call yesterday, which reported revenue of $45.8 billion and assets under management of $4.8 trillion, representing an 18% year-over-year increase.
On the call, Dimon shared a mixed outlook on the economy, saying that “while labor markets have softened, conditions do not appear to be worsening.” He added that consumers remain resilient in their spending and “businesses generally remain healthy.” That’s despite upheaval in markets, which last year had to wrangle with rapidly changing foreign and trade policy from the White House.
While the billionaire banker was bullish on artificial intelligence, he also reiterated his warning that a looming shadow over the macroeconomic outlook is government debt. He has previously cautioned that Washington faces a market “rebellion” over the issue.
When asked about his outlook for 2026, Dimon said the short-term looked good. He explained: “Call it six months and nine months and even a year, it’s pretty positive. Consumers have money. There’s still jobs, even though it’s weakened a little bit. There’s a lot of stimulus coming from the One Big Beautiful Bill. Deregulation is a plus in general, not just for banks, but banks will be able to redeploy capital.”
However, the macro “backdrop” must also be considered, he added, and these work on different timelines: “Geopolitical is an enormous amount of risk … It’s just a big amount of risk that may or may not be determining the fate of the economy.”
He continued: “The deficits in the United States and around the world are quite large. We don’t know when that’s going to bite. It will bite eventually because you can’t just keep on borrowing money endlessly.”
That doesn’t seem to have trickled through to government, which spent $276 billion on interest payments on the national debt in the final three months of 2025 alone. In its most recent budget review released Friday, the Congressional Budget Office reported that the deficit totaled $601 billion in the first quarter of the fiscal year 2026 (October to December), $110 billion less than the deficit recorded the same period last year.
Following the release, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the U.S. government is already on track for a $2 trillion deficit in 2026. “Meanwhile, despite being more than a quarter into [fiscal 2026], our government is still not fully funded for the rest of the fiscal year, with another funding deadline around the corner in just over two weeks,” she added. “Lawmakers should come to an agreement on appropriations that avoids increasing our debt even more, restores the caps on discretionary spending, and maintains flat funding from the last fiscal year.”
White House officials have argued that tariff revenue will offset some of the government’s borrowing (despite the president also promising it for other uses), but Dimon remained realistic. “We have to deal with the world we got, not the world we want,” he said, adding his focus is not to guess economic outcomes but serving clients.
Who owns America’s debt?
One of the paths out of a potential debt crunch is that a central bank could simply print more money. By increasing the supply of money, the value of a currency is pushed down, making the interest payments on borrowed money relatively cheaper. However, this comes with inflationary, or hyperinflationary, side-effects.
Moreover, buyers of debt may realise the returns they are getting are decreasing in value, and so demand higher interest payments in the future.
This would be less of a concern for some buyers than others. For example, according to Treasury data analysis by the Peter G Peterson Foundation, which focuses on maintaining a stable fiscal future, the Federal Reserve System is the largest single holder of U.S. debt, owning $4.5 trillion as of March 2025. State and local governments own $1.7 trillion, and mutual funds own $4.4 trillion.
A problem may come from further afield, particularly if geopolitical tensions continue to rise, tempting foreign governments to order their central banks to ditch U.S. debt in protest. That would hurt the value of the dollar, generate inflation, and force the interest yield on U.S. debt upward—all scenarios that would make life more expensive for the federal government.
Investors in Japan, China, and the U.K. are among the highest buyers of U.S. debt, owning $1.1 trillion, $779 billion, and $765 billion, respectively. “While the holdings of U.S. debt by both [Japan and the U.K.] have declined over the past decade, China’s purchases of U.S. Treasury securities have declined more than Japan’s,” the foundation wrote.
Former President Bill Clinton and former Secretary of State Hillary Clinton said Tuesday that they will refuse to comply with a congressional subpoena to testify in a House committee’s investigation of Jeffrey Epstein even as Republican lawmakers prepare contempt of Congress proceedings against them.
The Clintons, in a letter released on social media, slammed the House Oversight probe as “legally invalid” and wrote that the chair of the House Oversight Committee, Republican Rep. James Comer, is on the cusp of a process “literally designed to result in our imprisonment.”
“We will forcefully defend ourselves,” wrote the Clintons, who are Democrats. They accused Comer of allowing other former officials to provide written statements about Epstein to the committee, while selectively enforcing subpoenas against them.
The intensifying clash adds another dimension to the fight over Epstein, raising new questions about the limits of congressional power to compel testimony. It also comes when Republicans are grappling with the Justice Department’s delayed release of the Epstein files after a bipartisan push for their release.
Possible contempt of Congress proceedings
Comer said he’ll begin contempt of Congress proceedings next week. It potentially starts a complicated and politically messy process that Congress has rarely reached for and could result in prosecution from the Justice Department.
“No one’s accusing the Clintons of any wrongdoing. We just have questions,” Comer told reporters after Bill Clinton, a onetime Epstein friend, did not show up for a scheduled deposition at House offices Tuesday.
He added, “Anyone would admit they spent a lot of time together.”
Clinton has never been accused of wrongdoing in connection with Epstein but had a well-documented friendship with the wealthy financier throughout the 1990s and early 2000s. Republicans have zeroed in on that relationship as they wrestle with demands for a full accounting of Epstein’s wrongdoing.
“We have tried to give you the little information we have. We’ve done so because Mr. Epstein’s crimes were horrific,” the Clintons wrote in the letter.
Multiple former presidents have voluntarily testified before Congress, but none has been compelled to do so. That history was invoked by President Donald Trump in 2022, between his first and second terms, when he faced a subpoena by the House committee investigating the deadly Jan. 6, 2021, riot by a mob of his supporters at the U.S. Capitol.
Trump’s lawyers cited decades of legal precedent they said shielded an ex-president from being ordered to appear before Congress. The committee ultimately withdrew its subpoena.
Comer also indicated that the Oversight committee would not attempt to compel testimony from Trump about Epstein, saying that it could not force a sitting president to testify.
Trump, a Republican, was also friends with Epstein. He has said he cut off that relationship before Epstein was accused of sexual abuse.
Comer cast the subpoena for the Clintons as a bipartisan effort. But when a subcommittee of the Oversight panel initiated its overall investigation into Epstein in August, it adopted the subpoenas for the Clintons without allowing Democrats to cast individual votes.
The Justice Department also has not completely fulfilled the committee’s subpoena for its files on Epstein.
Lawmakers want the Epstein files
Meanwhile, the congressional co-sponsors of legislation that forced the public release of investigative documents in the sex trafficking probe of Epstein and British socialite Ghislaine Maxwell asked a New York judge in a letter to appoint a neutral expert to oversee release of the materials. The letter, dated Jan. 8, was delivered to the judge Monday night.
U.S. Rep. Ro Khanna, a California Democrat, and Rep. Thomas Massie, a Kentucky Republican, told U.S. District Judge Paul A. Engelmayer they had “urgent and grave concerns” that the Justice Department has failed to comply with the Epstein Files Transparency Act, which required the files to be released last month. They said they believed “criminal violations have taken place” in the release process.
Engelmayer presides over the Maxwell case. Maxwell, a former Epstein girlfriend, is serving a 20-year prison sentence after her 2021 sex trafficking conviction for recruiting girls and women to be abused by Epstein and for sometimes joining in the abuse. Last month, Maxwell sought to set aside her conviction, saying new evidence had emerged proving constitutional violations spoiled her trial.
Justice Department officials, who did not immediately respond to a request for comment Tuesday, have said the files’ release was slowed by redactions required to protect the identities of abuse victims.
In their letter, Khanna and Massie wrote that the Department of Justice’s release of 12,000 documents out of more than 2 million documents being reviewed was a “flagrant violation” of the law’s release requirements and had caused “serious trauma to survivors.”
“Put simply, the DOJ cannot be trusted with making mandatory disclosures under the Act,” the congressmen said as they asked for the appointment of an independent monitor to ensure all documents and electronically stored information are immediately made public.
They also recommended that a court-appointed monitor be given authority to notify and prepare reports about the true nature and extent of the document production and whether improper redactions or conduct have taken place.
Engelmayer directed the Justice Department and Maxwell, if she wishes, to respond to the allegations from the congressmen by Friday.
___
Associated Press writers Michael R. Sisak and Larry Neumeister in New York contributed to this report.
Good morning. JPMorgan Chase reported fourth-quarter 2025 earnings on Tuesday, with investors looking past solid headline results to focus on higher expected costs and a one-time reserve tied to the Apple Card deal, sending shares modestly lower.
The bank posted net income of $13 billion, down 7% from a year earlier due to a $2.2 billion pre-tax credit reserve build related to its pending acquisition of the Apple Card portfolio from Goldman Sachs. Revenue rose 7% to $46.8 billion, while net interest income climbed 7% to $25.1 billion, driven by higher revolving credit card balances and improved deposit margins.
“As the first bank to report results and the largest bank in the U.S., JPMorgan’s earnings serve as a barometer of consumer, corporate, and financial system health,” Morningstar Director Sean Dunlop wrote in a note on Tuesday. “The bank’s broad-based revenue growth suggests all three remain in good shape, though management’s tone and excess reserves point to a cautious outlook beyond 2026.” Dunlop raised his fair value estimate for JPM shares to $289 from $259, while still viewing the stock as expensive.
CFO Jeremy Barnum said on the earnings call that consumers and small businesses remain resilient. JPMorgan projected 2026 expenses of about $105 billion, with Barnum describing the increase as a function of structural optimism and the need to invest to stay ahead. “More generally, the environment is only getting more competitive, and so it remains critical to ensure that we are making the necessary investments to secure our position against both traditional and non-traditional competitors,” he explained.
During the Q&A session, CEO Jamie Dimon said higher spending, including on technology and AI, is necessary to compete with fintechs such as Revolut and SoFi, as well as established financial firms like Charles Schwab.
“These are good players,” Dimon said to analysts on the call. “We analyze what they do and how they do it… We are going to stay out front — so help us God. We’re not going to try to meet some expense target and then 10 years from now you’d be asking us the question, ‘How did JPMorgan get left behind?’”
Barnum also warned that President Donald Trump’s proposal to cap credit card interest rates at 10% would likely reduce access to credit rather than help consumers, arguing that intense competition already compresses margins and that price controls would force broad lending cutbacks — especially for higher-risk borrowers.
Betsabe Botaitis was appointed CFO of P2P.org, a non-custodial institutional staking provider. Botaitis brings over 20 years of leadership across financial services, fintech, and Web3, with experience building governance and operations in high-growth organizations. Most recently, Botaitis served as CFO and treasurer at Hedera. Botaitis’ career spans both traditional financial institutions and crypto-native organizations. She began in retail banking before holding senior finance roles at Citigroup and LendingClub, and later co-founding and serving as CFO of a blockchain company. Julie Feder was appointed CFO of Obsidian Therapeutics, Inc., a clinical-stage biotechnology company. Feder brings over 20 years of strategic finance experience in life sciences and health care. Feder joins Obsidian from Aura Biosciences, where she served as CFO for six years. Before Aura, she was CFO at Verastem. Before that, Feder spent six years at the Clinton Health Access Initiative, Inc., as CFO.
Big Deal
Global law firm Hogan Lovells has published its Employment Horizons for 2026 report. The firm analyzes the most pressing issues impacting employers worldwide. This year’s report examines emerging developments such as new rules on AI and data use in the workplace, shifting protections for vulnerable workers, evolving pay transparency requirements, changes to working time and family‑friendly policies, and renewed scrutiny of non‑compete agreements.
As I was collecting Crystal Ball predictions for 2026 from readers, I found myself thinking a lot about the future of work.
In part, of course, that’s because you all were thinking about it—combing through email after email, I found waves of predictions about how AI will change our workplaces and our jobs. And I sensed two things: An undercurrent of anxiety, and a resounding sense that AI is our now and future coworker.
The anxiety may have been yours, readers, but it was perhaps mostly mine: I think it’s possible we’re moving towards a future where the most mundane tasks we humans have to do right now are taken over by agentic armies in a way that’s fundamentally good. Much as the Internet created new ways of working that have improved people’s lives, I’m hopeful that AI can too. But then, there’s part of me that says: No, we’re about to move into a world of relentless job contraction and depersonalized professional interactions, made more depressing by the fact they spring from craven laziness above all else.
All of this to say, I’m conflicted. And my ambivalence isn’t helped by the fact that Term Sheet readers—many of whom are investing in the technologies and startups that will shape tomorrow’s workplace—have divergent perspectives. Here’s a sampling of how readers are thinking about an issue that will only become more consequential going forward:
We will start hiring digital employees. We will start treating AI agents like junior staff with job titles, budgets, and spending limits. Once an agent can issue a refund or buy inventory, it stops being a tool and becomes a worker. —Cathy Gao, partner, Sapphire Ventures
You can now build digital autonomous workers that handle large portions of front-office work. We’re heading toward models and agents that can complete a full day’s worth of work with minimal or no human intervention, and we may already be there in some domains. —George Mathew, managing director, Insight Partners
In 2026, companies who rushed to make layoffs hoping AI would fill a significant gap will realize they need to re-hire to fill some of those roles. We saw this starting this year with companies like Klarna, re-hiring to fill customer service roles that chatbots failed at. Next year, we’ll see more of this. —Mahe Bayireddi, CEO and cofounder, Phenom
2025 made it clear that AI would shrink teams by carrying more of the workload. In 2026, the bigger shift will be who gets hired. Companies are increasingly pairing a small number of senior technical leaders with AI-fluent operators, often without traditional CS backgrounds. For VCs, this shift will redefine what a ‘strong early team’ looks like and how capital efficiency is priced. —Jiaona Zhang, CPO at Laurel
New grad hiring will continue to slow and niche talent, either for AI or specific backend infra, will be paid top dollar. As AI makes boilerplate programming table stakes, only great talent will be rewarded. Fewer people will want to major in Computer Science. —Deedy Das, partner, Menlo Ventures
The tensions around returning to the office in any form of mandated pattern are going to continue. While employers might argue it’s a hirer’s job market, if we have an exodus of talent it’s really hard to replace those skillsets. —Livia Bernardini, CEO, Future Platforms
The first real shockwave from AI won’t hit junior analysts; it’ll hit outsourcing. Anything that was being subcontracted to offshore hubs is up first, as AI takes over the repetitive, process-heavy work that used to justify those models. —Raj Bakhru, general manager and cofounder, Blueflame AI
Human judgment will stay at the heart of HR. While AI will streamline recruiting, compensation analysis, and enhance employee experience, humans will remain essential for interpreting nuance, intent and values. HR functions will evolve toward augmented intelligence. —Niki Armstrong, chief administrative and legal officer, Pure Storage
In 2026, agentic AI moves from copilots to autonomous operators. Agentic systems will handle entire workflows, turning automation into a competitive weapon. —Diane Yu, cofounder, Tidalwave
We will see companies and consumers ‘hire’ AI agents to act on their behalf. 2026 will be the year society adjusts to the new realities of AI agents and focuses on what guardrails we expect from the companies behind them. —Don Butler, managing director, Thomvest Ventures
The Term Sheet Podcast is back!… Our first episode of 2026 just dropped. My guest: Jenny Xiao, founder of Leonis Capital and former OpenAI researcher. She talks about why AI companies should be valued closer to (or even below) SaaS, the role academia plays in AI progress, the possibility of another “DeepSeek” moment, and more. Listen and watch here.
Joey Abrams curated the deals section of today’s newsletter.Subscribe here.
VENTURE CAPITAL
– Onebrief, a Honolulu, Hawaii-based operating system for the military, raised $200 million in Series D funding. BatteryVentures and Sapphire Ventures led the round and were joined by SalesforceVentures and others.
– JetZero, the Long Beach, Calif.-based designer of the world’s first all-wing airplane, raised $175 million in Series B funding. BCapital led the round and was joined by UnitedAirlinesVentures, Northrop Grumman, and others.
– Proxima, a New York City-based AI-powered drug discovery platform for proximity therapeutics, raised $80 million in seed funding. DCVC led the round and was joined by NVentures, Braidwell, Roivant, AIXVentures, and others.
– WasabiTechnologies, a Boston, Mass.-based cloud storage company, raised $70 million in funding. L2 Point Management led the round and was joined by PureStorage and existing investors.
– WitnessAI, a Mountain View, Calif.-based AI security platform, raised $58 million in funding. SoundVentures led the round and was joined by FinCapital, QualcommVentures, SamsungVentures, and ForgepointCapitalPartners.
– WithCoverage, a New York City-based AI-powered risk management platform designed to replace insurance brokers for businesses, raised $42 million in Series B funding. SequoiaCapital and KhoslaVentures led the round and were joined by 8VC and CrystalVenturePartners.
– Flip, a New York City-based developer of an AI program that automates customer service calls, raised $20 million in Series A funding. NextCoast Ventures and RidgeVentures led the round and were joined by DataPointCapital and others.
– Tive, a Boston, Mass.-based developer of supply chain and logistics visibility technology, raised $20 million in funding. LightsmithGroup led the round and was joined by SageviewCapital, WorldInnovationLab, AVP, and SupplyChainVentures.
– Klearly, an Amsterdam, The Netherlands-based payment acceptance platform for small and medium-sized businesses, raised €12 million ($14 million) in Series A funding. PayPalVentures led the round and was joined by ItalianFoundersFund and existing investors.
– RISALabs, a Palo Alto, Calif.-based developer of an AI operating system designed for oncology, raised $11.1 million in Series A funding. CencoraVentures and OptumVentures led the round and were joined by others.
– OurPetPolicy, a Boise, Idaho-based pet and emotional support animal platform for rental properties, raised $8 million in Series A funding. RETVentures led the round and was joined by StageDotO and CapitalEleven.
– GrowthPal, a New York City-based developer of an AI copilot designed for M&A, raised $2.6 million in funding. IdeaspringCapital led the round and was joined by angel investors.
PRIVATE EQUITY
– ArlingtonCapitalPartners acquired Pond & Company, an Atlanta, Ga.-based consulting firm for engineering, architecture, planning, and construction management. Financial terms were not disclosed.
– PlatinumEquity acquired a majority stake in NortonPackaging, a Hayward, Calif.-based plastic pails and packaging company. Financial terms were not disclosed.
– WindRose Health Investors acquired a majority stake in AvalonHealthcareSolutions, a Tampa, Fla.-based health diagnostics platform. Financial terms were not disclosed.
EXITS
– Aurex, backed by GodspeedCapital, acquired Alpha 2, a Chantilly, Va.-based provider of cryptographic engineering, cybersecurity, and engineering services. Financial terms were not disclosed.
– Investindustrial acquired Proveris, a Hudson, Mass.-based designer and manufacturer of spray and aerosol testing instrumentation, software and laboratory solutions for the pharmaceutical industry. Financial terms were not disclosed.
– MPearlRock acquired The Good Crisp Company, a Boulder, Colo.-based healthy snack company. Financial terms were not disclosed.
– O’Hara’s Son Roofing, a portfolio company of AngelesEquityPartners, acquired CPRankin, a Chalfont, Pa.-based roofing company. Financial terms were not disclosed.
– PrimeSourceBrands, backed by ClearlakeCapitalGroup, acquired AdvantageIndustries, a Deerfield Beach, Fla.-based gate hardware and pool safety solutions manufacturer. Financial terms were not disclosed.
– TruArcPartners acquired SchillGroundsManagement, a Westlake, Ohio-based commercial landscaping company, from ArgonneCapitalGroup. Financial terms were not disclosed.
– Turn/River Capital acquired StarLIMS, a Hollywood, Fla.-based informatics platform for laboratories, from FranciscoPartners. Financial terms were not disclosed.
– ValorExteriorPartners, a portfolio company of OsceolaCapital, acquired LandmarkExteriors, a Norwalk, Conn.-based roofing company. Financial terms were not disclosed.
PEOPLE
– BregalInvestments, a London, U.K.-based private equity firm, promoted JensBrenninkmeyer to CEO.
– GarnettStationPartners, a New York City-based private equity firm, promoted RafiHaramati to managing director, BradleyEzratty to principal, MaxHoberman to principal, and TeddySokoloff to vice president.
– M13, a Santa Monica, Calif.-based venture capital firm, promoted MorganBlumberg to partner.
– PeriscopeEquity, a Chicago, Ill.-based private equity firm, promoted LukeElder to principal and HarryWaddoups to vice president.
Politics8 years ago