The CEO of JPMorgan Chase, Jamie Dimon, is preparing for a disturbance on the US treasury market nearly 30 billions of dollars – the one who, according to him, could force the federal reserve to intervene, as at the beginning of the COVVI -19 pandemic.
“There will be a Kerfuffle on the Treasury markets due to all rules and regulations,” said Dimon during a Friday income call, warning that the Fed will not act before “that they are starting to panic a little”.
Dimon’s comments arise as obligations give Spike increases and market volatility. The increase in returns suggested that investors withdraw from popular transactions that operate gaps between treasury prices and term contracts, adding stress to a market already shaken by trade tensions under the climbing of the American-Chinese trade war.
Dimon said the current regulations prevented banks from intervening as buyers when liquidity is delighted. In 2020, a similar situation forced the Fed to launch a bond purchase program for several thieves to operate the market.
He put pressure for reforms that would allow banks to act more freely as intermediaries. An idea under discussion is the exemption from treasury bills for lever ratio calculations, which could allow institutions to buy more public debts without hitting capital stamps.
“If they don’t do it [change the rules]The Fed will have to intermediary, which, I think, is only a bad political idea, “said Dimon.
The treasure market plays a central role in global finance, which sets the tone for everything, mortgage rates to bond yields of companies. Dimon warned that if the system locks again, the consequences could wave in the economy.
A disruption of the Treasury market which leads to the intervention of the Fed could conduct certain investors to Bitcoin (BTC), which is often considered as coverage against monetary instability. This seems to have been the case in 2020, when the Bitcoin price increased following the aggressive response of the Fed. Other factors, including the impact of half of the cryptocurrency cryptocurrency, could also have taken into account the leap in Bitcoin prices.
