JPMorgan Chase CEO Jamie Dimon has issued a stark warning about potential turmoil in the nearly $30 trillion U.S. Treasury market, cautioning that regulatory constraints could lead to a crisis requiring Federal Reserve intervention.
“There will be a kerfuffle in the Treasury markets because of all the rules and regulations,” Dimon said during JPMorgan’s Friday earnings call. “The Fed won’t act until they start to panic a little bit.”
Rising Yields and Liquidity Stress Fuel Dimon’s Concern
Dimon’s remarks come amid surging bond yields and rising market volatility, largely driven by trade tensions between the U.S. and China. Investors have recently backed away from arbitrage trades between Treasuries and futures contracts, putting pressure on market liquidity.
The JPMorgan CEO pointed to regulatory restrictions that prevent banks from stepping in to absorb Treasuries during periods of stress—a key issue during the 2020 pandemic meltdown, when the Fed had to inject trillions into bond markets to restore order.
Dimon Urges Rule Changes to Avert Central Bank Bailout
One solution Dimon supports is removing Treasuries from bank leverage ratio calculations, a change that could free up capital and allow banks to act as market stabilizers without breaching regulatory limits.
“If they don’t, the Fed will have to intermediate, which I think is just a bad policy idea,” he warned.
Why It Matters
The U.S. Treasury market forms the bedrock of global finance, impacting mortgage rates, corporate borrowing costs, and global economic stability. Dimon warned that another liquidity freeze, like in 2020, could trigger ripple effects across the entire economy.
With trade war uncertainties and interest rate expectations already rattling markets, Dimon’s comments signal growing concern among top financial leaders that systemic cracks may be forming again.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/jpmorgans-ceo-warns-fed-may-need-to-rescue-treasury-market/