Trump's finance guru slaps down America's top banker: 'His predictions have never come true'

 

Trump's finance guru slaps down America's top banker: 'His predictions have never come true'

The JPMorgan Chase CEO sounded alarm last week, cautioning America's overspending - especially during the pandemic - and quantitative easing will lead to a 'crack in the bond market'.

But Scott Bessent brushed off his fears, alleging throughout his 'entire career' Dimon has issued stark predictions and 'none of them have come true'.

'That's why he's a banker- a great banker. He tries to look around the corner,' Bessent told CBS News' Face the Nation with Margaret Brennan on Sunday.

Bessent argued 'we are going to bring the deficit down slowly' and highlighted how the US is 'taking in substantial tariff income right now', which he estimates could save the use $2 trillion.

He also pointed to Trump's plan for price controls on pharmaceuticals, alleging it could 'substantially push down costs for prescription drugs' and save the country 'another trillion'.

'We didn't get here in one year, and this has been a long process,' Bessent continued. 'So the goal is to bring it down over the next four years, leave the country in great shape in 2028.'

Bessent added that debt levels that 'the deficit this year is going to be lower than the deficit last year, and in two years it will be lower again'. 

America's top banker, however, did not seem phased by Bessent's dismissive remarks and doubled down on his debt warning Monday.

The JPMorgan Chase CEO told Fox Business' Mornings with Maria program that the national deficit is a 'big deal' that could create a 'tough time' for the bond market that causes spreads to widen.

'If people decide that the US dollar isn't the place to be, you could see credit spreads gap out; that would be quite a problem,' Dimon said. 

'It hurts the people raising money. That includes small businesses, that includes loans to small businesses, includes high yield debt, includes leveraged lending, includes real estate loans. That's why you should worry about volatility in the bond market.'

The comments echoed his earlier warnings about potential market turmoil, citing rising US government spending.

Dimon, during an interview at the Reagan National Economic Forum on Friday, warned of a 'crack in the bond market', but added that while the market may panic when it happens, the bank would likely benefit.

 Market makers like JPMorgan often benefit from volatility, as frequent exchange of assets drives up brokerage fees for their trading desks.

 

'I'm hoping that we change both the trajectory of the debt and the ability of market makers to make markets,' Dimon warned, while suggesting the 'crack' could appear in 'six months or six years'.

Shifting US economic policies have sent bond markets tumbling in recent weeks.

Trump's flip-flop on trade policies, along with suggested tax cuts and spending surge, have sent the bond markets tumbling in recent weeks.

The rise in treasury yields post 'Liberation Day' tariffs, which Trump described as the bond market acting 'yippy', forced him to hit a 90-day pause on tariffs. 

The banker, at the forum, also aligned himself with Trump's recent campaign to close the loophole that enables private market investors to benefit from lower taxes.

'We absolutely should be taxing carried interest,' he said, echoing Trump's efforts to close the provision long-cherished by investors.

Dimon proposed using the revenue to double income tax credits, even for individuals without children, noting that the estimated $60 billion additional cost from this initiative would directly benefit communities, families and homes.

 

Dimon, 69, is one of the most prominent voices in corporate America and has regularly been consulted by administrations during times of crisis. 

His name was floated for senior economic roles in government during the 2024 presidential campaign, including Treasury Secretary, but he stayed put at the bank.

Dimon has been running the biggest US lender for more than 19 years, outlasting many other CEOs.

When asked about the timeframe for his succession, Dimon said 'it's several years,' adding, 'there will be an appropriate time and then I may stick around for a couple of years as chairman or executive chairman... I love what I do.'