The head of the Treasury Scott Bessin says that Jimmy Damon should relax around the bond markets: “Throughout his career, he did expectations … none of them was fulfilled.”
- Treasury Secretary Scott Bessin underestimated his concern about the US debt on Sunday, Just days after Jpmorgan Chase CEO Jimmy Damon, a long time ago, warned of the effects of our spending on bond markets. Pesin said that the function of Damon in banking means that it should be worried, adding: “Throughout his career, he predicted such,” but “none of them was fulfilled.”
Jimmy Damon, CEO of JPMorgan Chase, has looked for years, a warning about the level of borrowing in the United States – and the late bond market appears to be agreed with it. But Treasury Secretary Scott Bessent does not buy these concerns, which indicates in the Sunday news program that they are somewhat exaggerated.
Talk to CBS ‘news Facing the nation On June 1, bessent to treat Damon’s latest fears about what Margaret Brennan’s host is in the name of the debt market crisis.
“Jimmy has known for a long time. For his entire professional life, he has predicted such,” Bessin said to Buranan. “Fortunately, none of them was fulfilled.”
He added: “That is why it is a wonderful banker. He is trying to look around the corner.” Pesin has also faced a widespread prediction that the Republican Party spending bill – which flourishes government benefits and reduces taxes, most of them for the wealthy – will cost between 4 to 5 trillion dollars over the next decade.
“The deficit will decrease slowly,” said Pesin, noting the income of customs duties and savings from President Donald Trump’s controls for the prescribed medications that would compensate for the difference.
“We did not get here in one year, and this was a long process,” he said. “So the goal is to drop it over the next four years, and leave the country in good condition in 2028.”
When asked luck To meet Damon on Friday with CNBCWhen the CEO addressed the National Economic Forum, Reagan and described the debt problem looming on the horizon, among other geopolitical concerns.
Bond market tensions
Dimon is far from the only person concerned with American debt and the direction of comprehensive policy: bond markets share his concern. In April, Selling bonds This prompted interest rates on US debt to the historical highlands that prompted Trump to retract his identification plans, and put a “stop” on mutual customs planning planned against most trading partners in the United States.
In May, Moody’s Credit Classification Agency It reduced US debtThis means that the United States no longer gets the highest rating of any of the three main credit agencies. During that month, the treasury revenues, which represent the level of risk investor in investing in the United States, increased steadily. Only last week, the return on the treasury note, which lasted 30 years, exceeded 5 %, which is an important psychological barrier, outside an increase in October 2023 Motivated by fears of inflation, it has not been seen since before the great recession.
Here’s how the bonds collapse, as Damon put it on Friday. Since the US debt, in the form of bonds, investors will demand a higher return, or interest rate, to compensate for the perceived risks that the debt may not be paid.
“Something like $ 30 trillion of securities deals every day. These are investors around the world,” Damon He saidSpeak to FoxBusiness Maria Bartopiromo on the sidelines of the National Economic Forum Reagan. He said: “People vote with their feet – and they will discuss in the country, the rule of law, the rate of inflation, and the policies of the central bank … These prices are not determined by central banks.”
This means that nervous investors may have to raise interest rates on treasury bonds and affect what the US government pays to borrow money, as well as things like mortgage prices – without the Federal Reserve to do anything about it.
Dienon said that it would require debt reduction.
With the spending of the United States government after birth, “We have reached $ 10 trillion in five years,” he said, speaking to him CNBC In the same event. When Ronald Reagan warned for the first time of deficit in the 1980s, “debt to GDP [ratio] It was 35 % and the deficit was 3.5 %. Today is 100 %, and the deficit is 7 %. The highest time ever. “
“What I really am concerned is we. Can we collect our work together, our own ability, our own management,” Damon said later. “If we have not been the prominent army and the prominent economy for 40 years, we will not be the backup. This is a fact. Just read history.”
This story was originally shown on Fortune.com
