May 12, 2023: On Thursday, JPMorgan Chase CEO Jamie Dimon said that markets would be gripped by panic as the U.S. approaches possible default on its sovereign debt.
Dimon told Bloomberg in a televised interview that an actual default would be “potentially catastrophic”. Dimon said he expects the worst-case scenario to be avoided because lawmakers will be forced answering to growing concerns.
“The closer gets to it; you will have terror” in the form of stock market volatility and upheaval in Treasurys, he stated.
Dimon joined a host of firm figures and administration officials making dire predictions regarding the consequences of failing to raise or suspending the U.S. debt limit and permitting the world’s largest economy to default on its bonds. Treasury Secretary Janet Yellen has stated that the idea that the country could default can be “unthinkable” and would lead to financial disaster.
“If it is getting to that panic point, people have to act; we’ve seen that before,” Dimon states.
But “it’s a terrible idea because panic has been something that is not good,” he added. “It could affect other businesses around the world.”
Dimon said that JPMorgan, the huge U.S. bank with regarding $3.7 trillion in assets, has been making for the risk of an American default.
Such an event rippling through the financial world, which improves “contracts, collateral, clearing houses, and affect clients around the world,” he said.
He said that the bank’s so-called war room had been together once weekly, a rate that will shift to the daily discussion around May 21 and three meetings every day after that.
He urged politicians from major U.S. parties to compromise and avoid a ruinous outcome.
“Please negotiate a deal,” Dimon said.