JPMorgan Chase CEO Jamie Dimon has sounded the alarm about the ‘enemy within’ America, which he warned is a bigger threat than China.
Dimon claims the United States is suffering from a worrying government ‘mismanagement’ issue which has the potential to ‘kill us’.
‘China is seen as a potential adversary. They are excelling in many areas, while also facing numerous challenges,’ he remarked during the Reagan National Economic Forum last Friday.
‘But what I really worry about is us. Can we get our own act together – our own values, our own capability, our own management?’
The CEO of the largest bank in the United States, Jamie Dimon, highlighted that the pervasive ‘mismanagement’ across various levels of the government could pose a significant threat to the country’s economy.
Dimon emphasized, ‘The level of mismanagement is staggering – at the state, city, and pension levels, and this misalignment could have detrimental effects on the nation.’
Dimon sounded the alarm on a ‘crack’ appearing in the bond market as a result of the wildly soaring national debt – which Trump is set to compound with the $3 trillion Big Beautiful Bill awaiting Senate approval.
A ‘crack’ in the bond market occurs when investors lose confidence in the government’s ability to service its debt. Bonds are sold, yields go higher and the cost of borrowing increases for all Americans, including the government itself.
‘You are going to see a crack in the bond market. It is going to happen,’ Dimon told the economic forum, predicting it could appear in six months to six years.
‘I’m telling you it’s going to happen, and you’re going to panic. I’m not going to panic. We’ll be fine. We’ll probably make more money.’
Dimon clarified that a crack in the market hasn’t happened yet, but is confident it will occur.
‘I just don’t know if it’s going to be a crisis in six months or six years, and I’m hoping that we change both the trajectory of the debt and the ability of market makers to make markets,’ he added.
The banking expert predicted the US could grow 3 percent per year if leaders fixed the issues surrounding permitting, taxation, regulations, immigration, health care, and schools in the inner city.
He added: ‘We have to get our act together. We have to do it very quickly.’
Dimon also claimed the US should be taxing carried interest, a loophole that has allowed private market investors to benefit from lower taxes.
‘We absolutely should be taxing carried interest,’ he said, adding to President Donald Trump’s recent campaign to close the provision long-cherished by investors.
He suggested the revenue can be used to double income tax credits for individuals with children, adding that the money will flow directly into the communities.
Carry – which refers to the part of private fund managers’ compensation tied to profits generated – is currently taxed as a long-term capital gain, allowing fund managers to pay lower taxes compared to ordinary income.
Closing the loophole has been a bipartisan issue for over a decade, with successive administrations promising to close it.
A 2021 Congressional Budget Office estimates that doing so would raise tax revenue by $14 billion over 10 years.
Private equity and hedge funds have opposed such legislation, saying it could potentially hurt small businesses as well as institutional investors, such as endowments, foundations and pension funds.
Industry groups in February had opposed Trump’s plan to close the lucrative tax workaround.
Dimon, 69, has run JPMorgan Chase, the largest US bank, for more than 19 years, outlasting many other CEOs, and is one of the most prominent voices in corporate America.
His remarks at Friday’s forum come just days after he delivered a sobering assessment of the US economy and warned the true fallout from Trump’s sweeping tariff policy has yet to be felt.
During dramatic appearance at JPMorgan Chase’s annual investor day, Dimon said behind the scenes of a soaring stock market lies a deep and under-appreciated risk.
He is known for his measured analysis but he believes rising costs, uncertain trade flows, and an American economy perched precariously atop artificially inflated asset prices make for an uncertain time.
‘There’s an extraordinary amount of complacency,’ the nation’s most powerful banker said on May 19. ‘The last time the country saw 10 percent tariffs on all trading partners was 1971.’
Dimon pulled no punches as he described Trump’s tariff strategy as ‘pretty extreme,’ even in its scaled-back form following an April 2 announcement that placed most tariffs on a temporary 90-day pause.
A federal appeals court temporarily reinstated the most sweeping of Trump’s tariffs on Thursday – a day after a US trade court ruled the president had exceeded his authority in imposing the duties and ordered an immediate block on them.
While the exact level of tariffs that will remain on trading partners is unknown, traders expect the levies to persist in some form.
White House trade adviser Peter Navarro said on Thursday that the Trump administration will seek to enact tariffs through other means if it ultimately loses the court fights over its trade policy.
Investors remain concerned that tariffs will slow growth and reignite inflation, though deals to drop tariff increases on China and the European Union as they negotiate trading terms have reduced pessimism over the US economic outlook.
