JPMorgan s Jamie Dimon Predicts Crack in the Bond Market, Citing U.S. Fiscal Mess – WSJ

JPMorgan JPM -0.14%decrease; red down pointing triangle Chase Chief Executive Jamie Dimon delivered a dire warning for the markets, predicting a crisis unless the U.S. takes steps to address its spiraling national debt.

You are going to see a crack in the bond market, OK? Dimon said during an interview at the Reagan National Economic Forum in California. It is going to happen.

Bond markets have been rattled by the prospect that the already wobbly fiscal situation in the U.S. will worsen, should tax legislation backed by President Trump become law. A House-passed measure would increase projected budget deficits by some $2.7 trillion over a decade, adding to a national debt that already stands at more than $36 trillion.

That fiscal package spooked bond traders, leading to a selloff in benchmark 10-year Treasurys that sent yields up nearly a quarter point to 4.418% this month. Moody s Ratings stripped the U.S. of its triple-A credit rating, citing the government s towering pile of debt. And tepid demand for Treasurys at a May 21 auction added to concerns. 

Dimon noted that Covid had left the debt markets in disarray in early 2020, until the government responded with several actions that normalized trading and stimulated the economy. But they massively overdid it in the years that followed, he said. 

via www.wsj.com

Welp Jamie seems absolutely right to me. Of course robots might swoop in to save us all. Experts say there’s going to be a new AI religion, so perhaps this is appropriate.