Apr 30, 2026
Earlier this week in Oslo, JPMorgan Chase CEO Jamie Dimon told a room full of institutional investors and asset managers that the financial market is headed for a crisis.
Dimon attended the annual investment conference hosted by Norway's sovereign wealth fund on April 28 and warned of rising government debt levels in some of his statements.
Advertisement
"The way it's going now, there will be some kind of bond crisis, and then we'll have to deal with it," Dimon said (1).
He added that he isn't necessarily worried about the aftermath, saying, "I just think maturity should say you should deal with it, as opposed to let it happen."
For the average person with a 401(k), a mortgage or a savings account, that's worth paying attention to.
Why Dimon is worried
A bond is a loan you make to a government or company in exchange for regular interest payments. A bond crisis occurs when investors who make these loans lose confidence in the borrower and demand much higher interest rates to keep lending.
That can raise borrowing costs because government bond rates are the economy's anchor. When they spike, banks raise interest rates on mortgages, credit cards and business loans, making it more expensive for everyone to borrow.
Dimon explained at the conference how three specific pressures could contribute to this bond crisis:
- Geopolitical conflicts raising defense costs and energy prices.
- Oil prices elevated by the Iran war, feeding back into inflation.
- Government deficits that were already large before either of those pressures showed up.
These forces are harder to stabilize when they're happening at the same time as compared to when just one of them is happening.
Advertisement
"The level of things that are adding to the risk column are high, like geopolitics, oil, government deficits," Dimon said (1). "And they may go away, but they may not, and we don't know what confluence of events causes the problem."
And he's right. The Congressional Budget Office (CBO) projects the U.S. federal deficit will reach $1.9 trillion in 2026, and that federal debt held by the public will rise from 101% of GDP today to 120% of GDP by 2036 (2).
The Peter G. Peterson Foundation also reported that the U.S. paid $970 billion in interest on the national debt in 2025 alone — roughly double what it paid in 2022 (3). Interest payments on the national debt are now the second-largest line item in the entire federal budget, just behind Social Security. The CBO projects those annual interest payments to reach $2.1 trillion by 2036 (4).
Dimon also flagged the credit cycle. Private credit (a $1.7 trillion market of loans made by investment firms instead of traditional banks), is not big enough to crash the economy all by itself, but he is worried about what happens if a downturn hits everything at once.
"We haven't had a credit recession in so long, so when we have one, it would be worse than people think," Dimon said. "It might be terrible (1)."
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
What a bond crisis would look like
An example of Dimon's warning is what happened in the United Kingdom in September 2022.
Advertisement
When then-Prime Minister Liz Truss announced £45 billion in unfunded tax cuts, investors immediately sold UK government bonds (called gilts) rapidly (5).
The 30-year gilt yield spiked 200 basis points within a month, one of the largest moves ever recorded in that timeframe (6). U.K. pension funds, which had borrowed heavily against those bonds through derivatives strategies, faced immediate margin calls (demands for cash collateral they didn't have on hand).
To raise cash, they sold more gilts, which drove yields higher and triggered more margin calls. The Bank of England later said a number of pension funds were days from collapse (7). The central bank had to intervene as an emergency buyer, and buy the bonds that no one else wanted. Pension fund assets fell by around £425 billion (or 25%) and Liz Truss resigned 45 days into her tenure (8).
The U.S. is a far larger, more liquid market than the U.K., and the dollar's global reserve currency status provides more runway. Dimon's point is that the runway has shortened because big deficits and higher interest bills mean the system isn't as forgiving as it used to be.
How to protect yourself
Dimon isn't telling you to panic. He's telling you to think ahead. Here's how to do that in three ways:
Check your exposure
Review your retirement or investment accounts to see if you are heavily weighted in long-term bonds that are highly sensitive to interest rate hikes.
Advertisement
The iShares 20+ Year Treasury Bond ETF (TLT), which tracks long-dated U.S. Treasuries, has delivered a total return of -27.01% over the past five years as interest rates climbed, and it keeps increasing (9). Consider shifting part of that exposure into shorter‑duration or more diversified fixed‑income holdings, so you're not as vulnerable if rates keep rising.
Add inflation protection
Go for assets that perform better when inflation is high, like Treasury Inflation-Protected Securities (TIPS). TIPS are U.S. government bonds that increase their value with inflation.
TIPS are like a safety net against inflation (10): when prices go up, the bond's value and payments rise along with the Consumer Price Index, so your purchasing power doesn't erode. When inflation is low, they pretty much behave just like regular Treasury bonds.
Understand what you own in the credit market
In the U.S. bond market, investors generally distinguish bonds into two categories: investment-grade (which are generally safer, like government or stable company debt) and high-yield or 'junk' bonds (which pay more but come with a higher risk of default).
When the economy hits a rough patch, investors usually ditch those riskier junk bonds, which causes their prices to drop while safer bonds hold up better. To play it safe, Fidelity's bond market outlook for 2026 recommends sticking to high-quality, investment-grade bonds with intermediate terms to defend your portfolio against current conditions (10).
You don't need to be a fortune teller to handle this, and Jamie Dimon isn't trying to guess when a crisis will happen, either. His real point is that you shouldn't wait for the market to back you into a corner.
His words in Oslo, "I just think maturity should say you should deal with it, as opposed to let it happen," are just as true for your personal investments as it is for the government's budget.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1),(7); Congressional Budget Office (2),(4); Peter G. Peterson Foundation (3); The Guardian (5); Federal Reserve Bank of Chicago (6); City A.M. (8); Finance Charts (9); Fidelity (10)
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Godwin Oluponmile is a content specialist, SEO strategist and copywriter with seven years of expertise in finance, Web 3.0, B2B SaaS and technology. His work has been featured in publications such as Entrepreneur, HackerNoon, Blocktelegraph and Benzinga.
