Jamie Dimon warns US bond market will 'crack' under pressure from rising debt | Hacker News Reader

Jamie Dimon warns US bond market will 'crack' under pressure from rising debt

ft.com

11 pointswslh12 comments

It's a bit weird. He says there'll be a 'crack', which sounds pretty bad to me, but that we'll be fine.

> The JPMorgan Chase chief executive said on Friday that he had cautioned regulators: “You are going to see a crack in the bond market.” He added: “I’m telling you this is going to happen. And you are going to panic. I’m not going to panic. We’ll be fine.”

After scanning the transcript, I'm pretty sure he is referring to JP Morgan being fine, rather than the US economy or Americans in general.

Here's the whole interview: https://www.youtube.com/watch?v=1NHLha3jG2g

but if you look at bond yields, there really isn't that much of a freakout

something like the "Big Beautiful Bill" is going to pass, so its not like the bond market is working in a vacuum

anecdotally, if the world didn't meltdown at the outrageous levels of ten, twenty, thirty trillion in debt...why would the world all of a sudden collapse at forty trillion in debt? if debt was a timebomb, it should have detonated decades ago

Ships may list for a long time before they suddenly and dramatically sink.

if the USD sinks, the entire world sinks

backing off the USD is a hundred year project...you need an currency from a relatively open and law-bound Great Power that has demonstrated its staying power through conflict

there isn't anyone else who fits the bill...yet

We were talking debt, not USD. The federal government does not have the power to create money, despite what people think, and so they can't print money to pay off their debts.

> The federal government does not have the power to create money

The federal government choose not to have that power, they could technically take it back at any time with only political/market confidence consequences. With a crazy guy running things, anything is possible at this point.

> with only political/market confidence consequences

That's one way of downplaying what happens next...

Yep. But we live in interesting times.

https://archive.is/VnjHo

So why doesn’t he lower the interest rates? Money is fiat and the reserve requirement is 0.

You might ask why the fed does not reduce the interest rate to "save" the usd.

The reason is that it makes no difference. The usd is a fiat currency and relies on trust in the institutions, in this case the fed.

If they bail out the government, then other investors will loose confidence and the rate will go up, manifest as inflation.

At this point the US citizens are going to pay massively for this. Either through hyper inflation or. Increased taxes to pay the debt.

Jamie Dimon? He isn't the fed. Also, the interest rates set by the FED only apply to banks, not the yield of US treasuries, which is set by supply and demand for those treasuries.

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