JPMorgan Chase CEO Jamie Dimon warned Monday that the U.S. national debt poses a serious risk to bond markets, predicting that a disruption is imminent and could sharply widen credit spreads. Speaking on Fox Business's Mornings with Maria, Dimon said rising government borrowing and unchecked spending are setting the stage for volatility that will impact everything from small business loans to real estate lending.
"If people decide that the U.S. dollar isn't the place to be, you could see credit spreads gap out; that would be quite a problem," Dimon said. "It hurts the people raising money. That includes small businesses, that includes loans to small businesses, includes high yield debt, includes leveraged lending, includes real estate loans."
The comments echoed remarks Dimon made days earlier at the Reagan National Economic Forum in Simi Valley, California. "You are going to see a crack in the bond market," Dimon said Friday. "It is going to happen. And I tell this to my regulators, some of you who are in this room, I'm telling you it's going to happen, and you're going to panic."
"I'm not gonna panic," he added. "We'll be fine. We'll probably make more money, and then some of my friends will tell me 'We like crises because it's good for JPMorgan Chase.' Not really."
His remarks come as Treasury yields surge. The 30-year note jumped 0.25 percentage point in May, its biggest monthly increase since December, and hit a 52-week high above 5% on May 21, according to Dow Jones Market Data. The recent downgrade of U.S. sovereign debt by Moody's from Aaa to AA+ has only intensified scrutiny of fiscal stability.
Dimon, who has led the nation's largest bank for over 19 years, emphasized that the root concern is more than just financial metrics. "If we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency," Dimon said. "That's a fact. Just read history."
He also took aim at the Trump administration's reported efforts to accumulate large quantities of Bitcoin as a strategic reserve. "We shouldn't be stockpiling Bitcoin," Dimon said. "We should be stockpiling guns, bullets, tanks, planes, drones, you know, rare earths."
