The longtime CEO of JPMorgan Chase & Co., Jamie Dimon, issued a warning about the bond market on Friday, telling authorities that they will “panic” if it occurs.
“You are going to see a crack in the bond market – OK,” Dimon stated while attending a Ronald Reagan Presidential Foundation event. “It is going to happen.”
And I notify my regulators—some of whom are present in this room—that this is going to occur. Additionally, you will become anxious.
Following severe turmoil in the bond market in April, Dimon has been a regular critic of banking regulations, pointing to “deep flaws” in the rules. Proposed adjustments to banks’ supplementary leverage ratio have been pointed out by him as likely to benefit the approximately $29 trillion Treasury market.
A precipitous sell-off of bonds in April has unsettled White House officials and put investors on edge. During the height of the unrest, President Donald Trump said that bond investors were becoming “yippy.”
After Trump halted some of his most harsh tariffs, markets experienced a strong May rally. On the belief that Trump would threaten but not implement the additional duties, some investors have been buying the decline. As a result, the S&P 500 index SPX is now almost back to where it was at the beginning of the year.
However, Treasury prices are still under pressure, which has caused rates to rise. According to Dow Jones Market Data, the longer-duration 10-year BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y yields saw their largest monthly yield rises of the year on Friday, rising 4.418% and 4.931%, respectively, up around 25 basis points in May.
Tom di Galoma, managing director of Mischler Financial Group, responded, “I don’t hold the same view as Jamie,” in response to a question concerning Dimon’s bond-market warning.
“I thought the bond market was broken back in April,” di Galoma stated, adding that the sector’s calm was reinforced by the successful Treasury auctions that took place over the past week, particularly the highly anticipated 7-year auction. He said that if necessary, the Federal Reserve and Treasury have measures at their disposal to help handle areas of conflict and strain in the industry.
Besent to save the day?
In an effort to loosen credit restrictions and defrost the housing market, Treasury Secretary Scott Bessent has made it clear that he wants to see lower 10-year Treasury yields. In light of this, Bessent stated that discussions regarding possible modifications to the supplementary leverage ratio were underway with U.S. banking regulators, and that findings might be forthcoming as early as this summer.
In order to keep credit markets accessible and operational, the Fed bought trillions of dollars’ worth of Treasury securities during the global financial crisis of 2007–2008 and again at the beginning of the epidemic in 2020. In an effort to improve market liquidity, the Treasury Department has also recently been repurchasing some Treasurys that trade less frequently.
Bond investors are still concerned, meanwhile, that the GOP’s big tax and spending measure may increase the US deficit, necessitating additional Treasury issuance and maintaining high interest rates.
Foreigners may sell or just allocate less to U.S. assets, such as stocks, Treasurys, and the dollar DXY, as a result of Trump’s haphazard tariff policy, which now includes U.S. courts.
These concerns were made clear last week when equities fell and investors were alarmed by a poor 20-year Treasury auction.
Dimon warned of difficulty for the bond market ahead, but he said, “I’m not going to panic,” on Friday. “We’ll be fine.”
Despite a 0.1% decline on Friday, JPMorgan’s stock (JPM) was up 10.1% for the year. According to FactSet, the S&P 500 ended the day up 0.5% in 2025, while the Dow was down 0.6% and the Nasdaq Composite was down 1%.
