‘You are going to panic,' Jamie Dimon tells regulators about what will happen when the bond market cracks

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a day ago

Jamie Dimon, JPMorgan Chase & Co.'s longstanding chief executive, fired off a warning about the bond market on Friday, telling regulators they will 'panic' when it happens.
'You are going to see a crack in the bond market — OK,' Dimon said, speaking at an event organized by the Ronald Reagan Presidential Foundation. 'It is going to happen.'
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'And I tell this to my regulators — some of who are in this room — I'm telling you this is going to happen. And you are going to panic.'
Dimon has been a frequent critic of banking regulations, pointing to 'deep flaws' in the rules in the wake of extreme tumult in the bond market in April. He has singled out proposed changes to banks' supplementary leverage ratio as likely to aid the roughly $29 trillion Treasury market.
A sharp bond selloff in April has kept investors on edge and rattled White House officials. President Donald Trump, during peak tumult, said that bond investors were getting 'yippy.'
Trump then paused some of his most aggressive tariffs, and stocks rallied powerfully in May. Some investors have been buying the dip on the view that Trump would threaten but not apply those higher levies. That has helped the S&P 500 index SPX get back to nearly where it started the year.
Treasury prices, however, remain under pressure, which has driven up yields. Longer-duration 10-year BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y yields were at 4.418% and 4.931%, respectively, on Friday, up about 25 basis points in May, their biggest monthly yield jumps this year, according to Dow Jones Market Data.
'I don't hold the same view as Jamie,' said Tom di Galoma, managing director at Mischler Financial Group, when asked about Dimon's bond-market warning.
'I though the bond market was broken back in April,' di Galoma said, adding that successful Treasury auctions over the past week, including a closely watched 7-year auction, helped reinforce calm in the sector. The Federal Reserve and Treasury also have tools to use if needed, he said, to help manage points of friction and stress in the sector.
Treasury Secretary Scott Bessent has been vocal about wanting to see lower 10-year Treasury yields, which could help unthaw the housing market and ease credit conditions. To that end, Bessent said work was being done with U.S. banking regulators on potential changes to the supplementary leverage ratio, and he noted that results could come as soon as this summer.
Read: Treasury Secretary Bessent has a plan to bring down long-term yields. But will it work?
The Fed purchased trillions of dollars in Treasurys during the 2007-08 global financial crisis and again in 2020, at the start of the pandemic, to reopen credit markets and keep them functioning. The Treasury Department lately has also been repurchasing certain Treasurys that trade less frequently to aid market liquidity.
However, bond investors remain anxious that the GOP's massive tax and spending bill could add to the U.S. deficit, which could require more Treasury issuance and keep rates elevated.
Trump's chaotic approach to tariffs, with U.S. courts now also in the mix, has also raised concerns about foreigners potentially selling — or simply allocating less to — U.S. assets, including the dollar DXY, stocks and Treasurys.
Those fears were evident last week after a weak 20-year Treasury auction spooked investors and stocks dropped.
'I'm not going to panic,' Dimon said Friday, as part of his warning of trouble ahead for the bond market. 'We'll be fine.'
JPMorgan shares JPM fell 0.1% Friday but were 10.1% higher on the year so far. The S&P 500 finished the session up 0.5% so far in 2025, while the Dow was 0.6% lower and the Nasdaq Composite was off 1%, according to FactSet.
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