It's just a matter of time! JPMorgan CEO Dimon warns that the US bond market may face a major impact.

On Friday, JPMorgan CEO Damon issued another warning at an event hosted by the Reagan Presidential Foundation, stating that a "crack" in the bond market is brewing and financial regulators may panic when it happens. "You will see cracks in the bond market, yes, it will definitely happen," Damon bluntly stated. "I have told regulatory agencies, some of whom are here today, I'm telling you, this will happen, and you will panic." These remarks once again highlight Damon's dissatisfaction with the current financial regulatory system. He has long been critical of banking regulations, especially after the intense volatility in the bond market in April, pointing out "deep flaws" in existing rules. He particularly questions the proposed adjustments to the supplementary leverage ratio by regulatory agencies, believing that if these reforms are implemented, they may help stabilize the US Treasury market of around $29 trillion. In fact, the intense selling in the US bond market in April caused continued nervousness among investors and caught the White House off guard. Former President Trump even remarked during the market turmoil that bond investors were "barking like little dogs." He subsequently paused some of the most aggressive tax hikes, leading to a strong rebound in the stock market in May. Some investors took advantage of the situation to "buy on the dip," believing that Trump would only issue threats and not actually escalate tariff policies, which helped the S&P 500 index almost return to its year-start level by mid-year. However, bond prices continue to be under pressure, causing yields to rise. As of Friday, the yields on 10-year and 30-year US Treasuries rose to 4.418% and 4.931%, respectively, with an increase of approximately 25 basis points in just one month in May, marking the largest monthly gain so far this year. Despite Damon's concerns about the market outlook, not all industry insiders agree with his views. Tom di Galoma, Managing Director of Mischler Financial Group, commented, "I think the bond market 'broke' back in April." He added that recent auctions, including the 7-year Treasury note, have been successful, indicating a return to calm in the market. He also believes that the Federal Reserve and the Treasury still have sufficient tools at their disposal to deal with potential market tensions. Treasury Secretary Benson is also working to ease the current situation. He publicly expressed a desire to see a decrease in the yield on the 10-year US Treasury note to stimulate the real estate market recovery and alleviate credit tightening. It is reported that Benson is collaborating with banking regulators to study potential reforms to the supplementary leverage ratio, with initial results possibly being announced as soon as this summer. In reality, the Federal Reserve previously maintained credit market operations by purchasing trillions of dollars' worth of government bonds during the 2008 financial crisis and the early stages of the COVID-19 pandemic in 2020. The Treasury Department has also recently improved market trading conditions by repurchasing illiquid government bonds. However, there are still a series of hidden risks in the market. The large-scale tax and spending bill proposed by the Republicans may further increase the federal budget deficit, leading to an increase in the issuance of US Treasury bonds and continued high interest rates. Additionally, uncertainties in Trump's tariff policy and legal issues have raised concerns among foreign investors about a decrease in willingness to allocate to the US dollar, US stocks, and Treasury bonds. These concerns became particularly evident following a weak auction of 20-year US Treasury bonds last week, shaking investor confidence and causing a pullback in the US stock market. Despite Damon's repeated warnings, he himself insisted at the event, "I will not panic, we will eventually get through this." As of Friday, JPMorgan's stock price had a slight decrease of 0.1%, but had accumulated a 10.1% increase so far this year. The S&P 500 index had a 0.5% increase year-to-date, while the Dow Jones fell by 0.6% and the Nasdaq dropped by 1%.