JPMorgan Chase & Co., longtime CEO Jamie Dimon issued a warning to the bond market on Friday, telling regulators that they will "panic" when it happens.
"You're going to see the cracks in the bond market - OK," Dimon said at an event organized by the President Ronald Reagan Foundation. "This will happen."
“I told my regulators – some people in this room – I told you that this will happen.
Dimon often criticized bank regulations, which showed “deep flaws” in rules following extreme turmoil in bond markets in April. He has proposed a proposed change to the bank's supplemental leverage ratio, as it has the potential to help the approximately $29 trillion fiscal market.
The huge bond sell-off in April put investors on the edge and shocked White House officials. President Donald Trump said during the peak that bond investors are “Yippy”.
Trump then paused, his most aggressive tariffs, stocks rallying vigorously in May. Some investors have been buying dips, believing that Trump will threaten those higher taxes. This helped the S&P 500 SPX recover almost the beginning of the year.
However, fiscal prices are still under pressure, which prompts yields to increase yields. The longer 10-year BX:TMUBMUSD10Y and 30-year BX:TMUBMUSD30Y yielded 4.418% and 4.931%, respectively, with the largest monthly yield this year at about 25 basis points, which is Dow Jones Jones market data.
"I don't have the same opinion as Jamie," said Tom Di Galoma, managing director of Mischler Financial Group.
"Although the bond market was broken in April," Di Galoma said, adding that successful treasury auctions, including the closely watched seven-year auction, helped strengthen the calm in the field. He said the Fed and the Treasury could also use tools to help manage friction points and stress in the industry.
Treasury Secretary Scott Bessent has been hoping to see lower 10-year fiscal yields, which could help eliminate the housing market and alleviate credit conditions. To this end, Bessent said working with U.S. banking regulators on potential changes in supplemental leverage, noting that results may begin this summer.
read: Finance Minister Bessent has plans to reduce long-term yields. But will it work?
The Fed purchased the trillion-dollar Treasury Department during the 2007-08 global financial crisis and again purchased the credit market and kept it running at the beginning of the pandemic. Recently, the Treasury also repurchased certain Treasurys with lower transaction volumes to help market liquidity.
But bond investors remain concerned that the Republican huge tax and spending bill could increase the U.S. deficit, which could require more treasury issuance and keep interest rates higher.
Trump's chaotic approach to tariffs, now joining the U.S. court, has also raised concerns that foreigners may sell (or only allocate less to U.S. assets) including Dollar DXY, stocks and Treasury bonds.
These concerns were evident last week after a 20-year fiscal auction scared investors and stocks down.
"I won't panic," Dimon said Friday, part of his warning to the bond market. "We'll be fine."
JPMorgan shares fell 0.1% on Friday, but have risen 10.1% so far. According to FactSet, the S&P 500 has risen 0.5% so far in 2025, while the Dow Jones index has fallen 0.6% and the Nasdaq composite volume is 1% lower.