JPMorgan Chase CEO Jamie Dimon issued a stark warning that the US is heading for a bond market crisis unless it tackles its exploding national debt. Speaking at the Reagan National Economic Forum, Dimon said plainly:
“You are going to see a crack in the bond market, OK? It is going to happen.”
A Ticking Fiscal Time Bomb
Dimon’s remarks come amid growing concern on Wall Street that the US government’s borrowing habits are unsustainable. With Treasury auctions happening hundreds of times each year to fund growing deficits, any sign of weak demand could trigger a catastrophic loss of confidence.
Former White House advisor Gary Cohn warned:
“We have the most robust debt market in the world – until we don’t. One or two bad auctions and we’re in a completely different system.”
Cohn, Dimon, and others pointed to a future in which foreign and domestic investors may simply walk away, forcing banks to absorb massive debt they don’t want — or risk failed auctions.
The Fiscal Firestorm Behind the Fear
- US credit rating downgraded by Moody’s in May to AA1, no longer the gold-standard AAA
- The “Big, Beautiful Bill” passed by the House lifts the debt ceiling by $4 trillion over the next decade while slashing taxes
- As deficits balloon, Treasury issuance must surge — adding pressure to an already wobbly bond market
Former Treasury Secretary Steven Mnuchin added:
“If we don’t have growth and we have these types of deficits, we’re going to have real issues… the bond market is going to have a problem with that.”
Real Risk: A Failed Treasury Auction
Former House Speaker Paul Ryan painted a chilling scenario:
“We could see a day where the 25 primary dealers only fill 50% of the book… and the government says, ‘Buy it all — or else.’”
If primary dealers (banks that are obligated to buy US debt) are forced to backstop auctions without true demand, volatility in credit markets could spike, triggering higher borrowing costs for businesses, homeowners, and the government alike.
Dimon Doubles Down
Speaking later on Fox Business, Dimon reiterated the stakes:
“If people decide the US dollar isn’t the place to be… you could see spreads gap out. That includes high-yield debt, real estate, small business loans. That’s why this matters.”
Dimon, 69, said he has no immediate plans to retire but emphasized the urgency for leadership in Washington to stabilize the fiscal outlook before it’s too late.
A Decade of Reckoning?
Ben Harris of the Brookings Institution, former chief economist at the Treasury under Biden, warned on Yahoo Finance’s Opening Bid:
“Whether it’s a day of reckoning or a decade of reckoning, it’s coming.”
Harris said the US debt is no longer viewed as entirely “risk-free” and any shift — even from 100% certainty to 99.8% repayment — has massive implications for global markets.
“This is no longer a risk-free asset. That makes our whole fiscal outlook that much worse.”
What Comes Next?
Congressional leaders, including French Hill and Frank Lucas, are now scrambling to evaluate how the Federal Reserve and the private sector can ensure stability in Treasury markets.
But with the government planning $3–$4 trillion more in debt issuance, the risk of a tipping point is growing. The 10-year yield has climbed sharply, signaling growing investor anxiety.
America’s debt addiction is finally hitting the market’s nerves. From bond spreads to Treasury auctions, cracks are forming. If Washington doesn’t act soon, the entire economic system could face a higher interest-rate reality — or worse, a full-blown debt crisis.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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