Fed Chair Jerome Powell says Jamie Dimon is wrong about a coming 'crack' in bond markets
Jamie Dimon has warned of a backlash in financial markets as a response to the U.S's worsening fiscal picture
Fed Chair Jerome Powell testifies in Congress. (Chip Somodevilla/Getty Images)
Federal Reserve Chair Jerome Powell isn't sold on JPMorgan Chase CEO Jamie Dimon's warning about a coming backlash in bond markets that could roil the U.S. economy.
Suggested Reading
During testimony Tuesday before the House Financial Services Committee, Republican Rep. Tim Moore of North Carolina asked Powell about whether he agreed with Dimon's remarks last month.
Related Content
"I don't want to say things like that," Powell responded. "I don't think that's something that's happening. Treasury markets are functioning well. And normally, and they did function through a period of pretty substantial stress, and as you pointed out.. they're focusing well now."
In late May, Dimon forecasted a backlash in financial markets as a response to the U.S's worsening fiscal picture.
“You are going to see a crack in the bond market, OK?” Dimon said at the Reagan National Economic Forum in California. “It is going to happen.”
Republicans in Congress are in the middle of muscling through President Donald Trump's $4 trillion tax-and-spending package over unified Democratic opposition. It's only partly paid for, and that has amplified worries among economists across the ideological spectrum about the growing size of the U.S. national debt.
Trump's "Liberation Day" tariffs in April sparked volatility in bond markets that led him to scale back those levies within days of the rollout. Unnerved investors had demanded higher returns in exchange for buying riskier bonds.
Since then, Treasury bonds have remained steady, and the 10-year yield stood at 4.3% on Tuesday. During his testimony, Powell also reaffirmed the U.S. dollar's strength as the world's reserve currency and called it "the place where people want to be."