The JPMorgan Chase CEO, Jamie Dimon, is preparing for an interruption in the United States Treasury market of about $ 30, one that says that he could force the Federal Reserve to intervene, as he did during the first days of the COVID-19 pandemic.
“There will be a kerfuffle in the treasure markets due to all rules and regulations,” Dimon said in a Friday profit call, warning that the Fed will not act until “they begin to panic a bit.”
Dimon’s comments occur when the increase in bonds and market volatility increases. Increasing yields have suggested that investors are withdrawing from popular operations that exploit the gaps between prices and treasure futures, adding stress to a market already shaken by commercial tensions under the growing commercial war between the United States and China.
Dimon said current regulations prevent banks from intervening as buyers when liquidity runs out. In 2020, a similar situation forced the Fed to launch a program to buy billionaire bonds to maintain market operation.
He is pressing for reforms that allow banks to act more freely as intermediaries. An idea in discussion is to exempt the treasure bonds of the calculations of the leverage relationship, which could allow institutions to buy more government debts without reaching capital shock absorbers.
“If they don’t [change the rules]The Fed will have to intermediate, which I think is a bad political idea, ”said Dimon.
The treasure market plays a central role in global finances, establishing the tone for everything, from mortgage rates to corporate bond yields. Dimon warned that if the system is blocked again, the consequences could cheat throughout the economy.
An interruption of the treasure market that leads to the intervention of the Fed could lead to some investors to Bitcoin (BTC), which is often considered a coverage against monetary instability. That seems to have been the case in 2020, when the price of Bitcoin increased after the aggressive stimulus response of the Fed. Other factors, including the impact of half of the 2020 cryptocurrency, could also have taken into account Bitcoin’s price leap.
