• actions that governments take or fail to take in response to the effects of the COVID-19 pandemic, as well as the effectiveness of any actions taken 

• isolationist foreign policies 

• the implementation of tariffs and other protectionist trade policies, or 

• political and social pressures with respect to governmental policies and actions. 

These types of political developments, and uncertainty about the possible outcomes of these developments, could: 

• erode investor confidence in the U.S. economy and financial markets, which could potentially undermine the status of the U.S. dollar as a safe haven currency 

• provoke retaliatory countermeasures by other countries and otherwise heighten tensions in diplomatic relations 

• lead to the withdrawal of government support for agencies and enterprises such as the U.S. Federal National Mortgage Association and the U.S. Federal Home Loan Mortgage Corporation (together, the “U.S. GSEs”) 

• increase concerns about whether the U.S. government will be funded, and its outstanding debt serviced, at any particular time 

• result in periodic shutdowns of the U.S. government or governments in other countries, and 

• increase investor reliance on actions by the Federal Reserve or other central banks, or investor perceptions concerning government support of sectors of the economy or the economy as a whole. 

These factors could lead to: 

• slower growth rates, rising inflation or recession 

• greater market volatility 

• a contraction of available credit and the widening of credit spreads 

• erosion of adequate risk premium on certain financial assets 

• diminished investor and consumer confidence 

• lower investment growth 

• large-scale sales of government debt and other debt and equity securities in the U.S. and other countries 

• reduced commercial activity among trading partners 

• the potential for a currency redenomination by a particular country 

• the possible departure of a country from, or the dissolution of, a political or economic alliance or treaty 

• potential expropriation or nationalization of assets, or 

• other market dislocations, including the spread of unfavorable economic conditions from a particular country or region to other countries or regions. 

Any of these potential outcomes could cause JPMorgan Chase to suffer losses on its market-making positions or in its investment portfolio, reduce its liquidity and capital levels, hamper its ability to deliver products and services to its clients and customers, and weaken its results of operations and financial condition. 

## Market 

## Economic and market events and conditions can materially affect JPMorgan Chase’s businesses and investment and market-making positions. 

JPMorgan Chase’s results of operations can be negatively affected by adverse changes in any of the following: 

• investor, consumer and business sentiment 

• events that reduce confidence in the financial markets 

• inflation or deflation 

• high unemployment or, conversely, a tightening labor market 

• the availability and cost of capital, liquidity and credit 

• levels and volatility of interest rates, credit spreads and market prices for currencies, equities and commodities, and the duration of any changes in levels or volatility 

• the economic effects of outbreaks of hostilities, terrorism or other geopolitical instabilities, cyber attacks, climate change, natural disasters, severe weather conditions, health emergencies, the spread of infectious diseases or pandemics, and 

• the health of the U.S. and global economies. 

All of these are affected by global economic, market and political events and conditions, as well as regulatory restrictions. 

In addition, JPMorgan Chase’s investment portfolio and market-making businesses can suffer losses due to unanticipated market events, including: 

• severe declines in asset values 

• unexpected credit events 

• unforeseen events or conditions that may cause previously uncorrelated factors to become correlated (and vice versa) 

• the inability to effectively hedge market and other risks related to market-making and investment portfolio positions, or 

• other market risks that may not have been appropriately taken into account in the development, structuring or pricing of a financial instrument. 

