Jamie Dimon on Bond Market, Inflation and Equities

Added: 2026-05-25

[00:00:00]The bond market is front and center. We're seeing yields at the highest levels in decades, yet we see the stock market keeps rallying.

[00:00:07]In fact, it's again in the money today. Should we be nervous or not.

[00:00:11]Now I think it's always reasonable in the investment world to be nervous a little bit because you've mentioned the opening.

[00:00:17]There's a lot of geopolitical risk. You have a bunch of wars going on which I hope are probably resolved. You have bond going up.

[00:00:24]Inflation is a little bit higher than people thought.

[00:00:26]So yeah, I've been you know, I'm not surprised.

[00:00:29]I think when people say you should be surprised, the bond rates can go up.

[00:00:33]The notion that somehow people said they'll never go up is the wrong notion.

[00:00:37]And so companies like us prepare for higher rates, lower rates, and, you know, figure those things can happen. The thing is, they're at the highest level in decades. I mean, that is where the surprise could be. I mean, they could be much higher than they are today. Oh, yeah.

[00:00:51]How much? I would say decades.

[00:00:52]But we've had like one of the greatest bull more other than the brief Covid, you know, since the great financial crisis, you had a huge bull market, huge, lower rates for the most part for a long period of time.

[00:01:02]But the world changes, you know, like, we may have gone from a savings go out to a to, not enough savings. You know, in the I investments in America alone, 450 billion last year, 75 this year, a trillion next year.

[00:01:17]Global deficits are all time highs and they are huge.

[00:01:21]so that governments, including ours, has to borrow huge sums of money more next year, this year. So, you know, people who own bonds, they tend to look at these things in both inflation and, you know, demands for capital and push up rates. The thing is, it's not just an inflation story right now. It's also, I guess, uh, credibility story, right? I mean, we we have, uh, an environment where everybody's trying to pay debt, and governments around the world have so much debt at a higher level. I mean, at some point it's going to hit.

[00:01:53]Yeah, it is going to hit like U.S. government debt is 30 trillion.

[00:01:57]The average rate is 3.5%, you know, so even today they can't possibly refinance financing at lower than that rate. Uh, they have another $2 trillion to do this year. Uh, so yeah, but the thing is, we don't know when we don't know when the. We'll get too scared about that, uh, when inflation makes it where people don't want on long term duration securities, where it's just a demand for capital.

[00:02:19]There have been examples in history where there's so much demand for capital rates are going up. But it's a very good reason people are making productive investments in, uh, in the world, government spending is often not that government spending is much more consumption related, which doesn't help, uh, future productivity. So, you know, all that spending to drive corporate profits. So people should be that surprised.

[00:02:40]Record profits are doing quite well too, which helps obviously, the stock market.