JPMorgan Chase CEO Jamie Dimon has for years sounded the alarm about the U.S.’s level of borrowing—and the bond market of late seems to agree with him. But Treasury Secretary Scott Bessent isn’t buying those worries, suggesting on a Sunday news show they’re a bit overstated.
“I have known Jamie a long time. And for his entire career, he’s made predictions like this,” Bessent told Brennan. “Fortunately, none of them have come true.”
He added, “That’s why he’s a banker, a great banker. He tries to look around the corner.” Bessent also took issue with the widely reported prediction that the GOP spending bill—which slashes government benefits and cuts taxes, mostly for the wealthy—would cost $4 to $5 trillion over the next decade.
“We are going to bring the deficit down slowly,” Bessent said, noting that income from tariffs and savings from President Donald Trump’s price controls on prescription drugs would make up the difference.
“We didn’t get here in one year, and this has been a long process,” he said. “So the goal is to bring it down over the next four years, leave the country in great shape in 2028.”
Here’s how the bond meltdown would happen, as Dimon laid it out Friday. As the U.S. issues debt, in the form of Treasuries, investors will demand a higher yield, or interest rate, to compensate for the perceived risk that the debt might not be paid back.
That means nervous investors could potentially bid up the interest rates on Treasuries and affect what the U.S. government pays to borrow money, as well as things like mortgage rates—without the Federal Reserve being able to do anything about it.
Getting it down will require a reduction of debt, Dimon said.
“What I really worry about is us. Can we get our act together, our own capability, our own management,” Dimon later said. “If we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency. That’s a fact. Just read history.”
