Jamie Dimon warned that interest rates may climb much further, even as bond yields sit at multiyear highs following a sharp selloff in long-dated U.S. debt.
"They could be much higher than they are today," the chairman and chief executive of JPMorgan Chase & Co. said in an interview with Bloomberg Television. "We may have gone from a saving glut to not enough savings."
Long-dated bonds have come under pressure on concern that higher oil prices may compel central banks to raise interest rates. A Financial Post article summarizing his comments noted concerns over government spending in Japan, the United Kingdom and the United States, alongside an artificial intelligence-driven boom supporting growth in the U.S. economy. These factors have contributed to investors demanding higher compensation to hold longer-maturity debt.
Dimon emphasized that higher rates should not be ruled out. "Bond rates can go up," he said. "The notion that somehow people say they will never go up is the wrong notion. Companies like us prepare for higher rates, lower rates."
U.S. Treasury yields have already moved sharply higher. The yield on 30-year Treasuries rose to levels last seen in 2007 this week, while the rate on two-year securities climbed to the highest since February 2025. The article attributes these moves to investor concerns over inflationary pressures linked to the Iran conflict and risks tied to U.S. deficit spending.
Bond markets weakened again Thursday, with yields rising further after reports that Iran's Supreme Leader issued a directive regarding the country's uranium stockpile. Oil prices also spiked on the news.
In the U.S. rates market, the two-year yield rose as much as five basis points to 4.11%, while the 10-year yield rose four basis points to 4.62%.
Traders are now pricing in a 70% chance of a quarter-point U.S. Federal Reserve rate hike by December, with a 25-basis point increase by March seen as virtually certain. That compares with expectations earlier in the year for more than two quarter-point rate cuts by the end of the year before the Iran conflict, according to swaps pricing referenced in the article.
Dimon also pointed to the scale of U.S. government borrowing. "U.S. government debt is $30 trillion, the average rate is 3.5%. Even today they can't possibly refinance it lower than that rate," he said. "They have another $2 trillion to do this year but the thing is we don't know when — we don't know when the world gets too scared about that, when inflation makes it where people don't want to own long-term duration securities."
He added that rising rates would affect credit markets as well. "Rates can easily go up more, and credit spreads can go up more," Dimon said. "At one point you're going to have lots of people having to refinance at higher rates."
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