Jamie Dimon: Government Spending Will Cause ‘Crisis’ in Bond Market

JPMorgan Chase CEO Jamie Dimon reportedly said Friday (May 30) that after excessive spending by the U.S. government and quantitative easing by the Federal Reserve, a crack in the bond market is “going to happen.”

Speaking at the Reagan National Economic Forum, Dimon said, per a Bloomberg report, “I just don’t know if it’s going to be a crisis in six months or six years, and I’m hoping that we change both the trajectory of the debt and the ability of market makers to make markets.”

Dimon added that a crack in the bond market may be what it takes to “wake us up,” according to the report.

The report said that U.S. treasuries are headed for their first monthly loss this year and that concerns about the country’s budget deficit increased amid lawmakers’ debates over the tax bill.

Dimon said May 19 that the markets have not accounted for the risks of inflation, stagflation, credit spreads tariffs and other challenges.

He said the chances of inflation and stagflation are greater than people think; credit spreads haven’t accounted for a potential downturn; the impact of tariffs is difficult to predict; and geopolitical risks are high.

Speaking after the markets had recovered from declines seen when the Trump administration announced tariff policies and when Moody’s Ratings downgraded the country’s credit rating from its top level, Dimon said: “The market came down 10%, it’s back up 10%; I think that’s an extraordinary amount of complacency.”

In April, Dimon said the country’s tariffs will likely trigger a recession. Dimon said a recession is “probably a likely outcome” and that he was “taking a calm view … but I think it could get worse if we don’t make some progress here.”

Friday’s Bloomberg report said that Dimon’s comments on the bond market echoed a prediction he made a month earlier that there will be a “kerfuffle” in the Treasury market that will lead to intervention by the Fed.

On Friday, Dimon said that he tells regulators that a crisis will happen and the regulators will panic, adding of JPMorgan Chase, “I’m not going to panic. We’ll be fine.”