The comments from Jamie Dimon last week are worth repeating

The comments Jamie Dimon on May 30 are worth re-upping.

He highlighted the ‘crack’ in the bond market in covid and the additional $10 trillion in US government debt issued since then, plus enormous amounts elsewhere.

“You are going to see a crack in the bond markets. It is going to happen. I am telling you its 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.”

He went onto say that some rules and regulations need to be changed so he might be talking his book.

He also didn’t put any kind of timeline a crack and said he didn’t know if was going to be in six months or six years.

I think that no one has learned anything from what happened at the start of covid, when yields shot higher before the Fed embarked on unlimited QE. We also got a taste of that after Liberation Day when yields jumped 70 basis points before settling down.

For me, the playbook right now in any crisis is to sell bonds first and I worry at this point that when that becomes conventional knowledge, it will add to the pressure on bonds in any ‘crack’.