JAKARTA – Jamie Dimon, Chief Executive Officer of JPMorgan Chase, has warned that the greatest threat to the United States may not come from China, but from within its own borders.

The US, he said, is suffering from alarming mismanagement at various levels of government that could potentially devastate its economy.

“China is a potential adversary. They do many things well, but they also have many problems,” said Dimon at the Reagan National Economic Forum on Friday (30/6), as quoted by DailyMail.

“But what I’m really worried about is us. Can we get our own act together—our values, our capabilities, our management?”

Dimon, who leads America’s largest investment bank, warned that mismanagement across federal, state and municipal governments could be the biggest trigger for an economic collapse in the US.

“The amount of mismanagement is extraordinary—by states, by cities, by pension funds. And things like that can kill us.”

He pointed to emerging "cracks" in the bond market due to surging US debt, which would be further strained by the pending USD 3 trillion Big Beautiful Bill awaiting Senate approval.

Cracks in the bond market occur when investors lose faith in the government's ability to repay its debts.

As the government sells bonds, yields rise, which in turn increases borrowing costs for all Americans—including the government itself.

“You’re going to see cracks in the bond market. I just don’t know whether that crisis is six months away or six years away.”

“I’m telling you it will happen—and you will panic. I won’t panic. We’ll be fine. We might even make more money.”

Long-term US bonds have come under pressure due to market fears over US fiscal sustainability.

The yield on the 30-year Treasury has climbed from just over 4 percent at the start of 2024 to around 5 percent. Ratings agency Moody’s also stripped the US of its triple-A credit rating earlier this month.

The US government bond market has grown from around USD 5 trillion in 2008 to USD 29 trillion today, driven by tax cuts and increased spending—particularly during the COVID-19 pandemic.

This has led the US Federal Reserve to record a loss of USD 192 billion—the first since 1915.

The US government bond market remains the deepest and most liquid in the world, long benefiting from the dollar’s status as the global reserve currency.

However, as the debt burden grows, demand for bonds has weakened. Foreign investors have gradually retreated from the US bond market over the past decade—a trend accelerated by Trump’s tariff policies.

In fact, in May, the Federal Reserve was reportedly forced to quietly purchase government bonds due to poor demand.

Dimon said that rising geopolitical tensions, trade wars, and soaring global debt were signs that the world’s economic “tectonic plates” are shifting.

He urged the US government to reverse its current debt management course and called on regulators to loosen constraints on banks to allow greater bond market participation.

“I think we can fix all of this—including that—just by changing and adjusting some of these rules and regulations.” (DH/MT/ZH)