JPMorgan head warned of the risk of a crisis in the bond market due to government debt

Rising levels of government debt could trigger a crisis in the bond market, JPMorgan Chase CEO Jamie Dimon has warned. The head of the largest U.S. bank by assets urged politicians to take action before markets force them to do so.

"In the current scenario, there will be some kind of crisis in the bond market, and then we'll have to deal with it. I'm not so worried that we won't be able to deal with it. I just think the mature approach requires dealing with it up front rather than letting it happen," Dimon said as quoted by CNBC. The JPMorgan head made the statement at the Norges Bank Investment Management conference in Oslo on April 28: he was asked if he was concerned about the growth of public debt "around the world and in your country," the channel reports.

History shows: the growing set of risks today can overlap in unpredictable ways, Dimon noted. While the timing is unknown, failure to address these challenges increases the likelihood that adjustment will occur in the aftermath of shocks, rather than as a result of deliberate policy moves.

"The level of factors that add to the risk column is high: geopolitics, oil, budget deficits," Dimon said. - They may or may not go away, and we don't know what confluence of circumstances will cause a problem."

A crisis in the bond market would probably mean a spike in yields and a disruption of market liquidity, with investors rushing to sell and buyers pulling back, CNBC explains. Usually in such a situation, central banks have to intervene as buyers of last resort, the channel writes. A recent example: the crisis in the British government bond market in 2022, when yields rose sharply and the Bank of England had to intervene to stabilize the market.

Dimon also commented on the market's fears about private loans. In his opinion, the crisis in this sector may be more serious than expected, despite the fact that both JPMorgan and its main competitors showed good results last quarter, writes Bloomberg. According to Dimon, more than 1,000 companies now operate in this segment, and probably not all of them will successfully cope with the changing cycle.

"Because of that, and because of underwriting standards, we haven't had a credit recession in so long, so when it comes, it will be worse than people think. It won't be terrible: just worse than people think in the private lending sector," Dimon said. - By the way, that may be true for some banks as well."

Amid concerns surrounding the $1.8 trillion private credit market, Dimon has repeatedly warned in recent months of potential problems in that segment, Bloomberg recalls. In October 2025, he was one of the first to warn of red flags due to bad loans. However, in his annual letter published in April, he wrote that private lending probably does not pose a systemic risk, and on Tuesday he reiterated that assessment.

This article was AI-translated and verified by a human editor