Wednesday, August 9, 2017

Dimon Sides With Bears, Says Sovereign Bonds Are Too Pricey

JPMorgan CEO says he wouldn’t buy 10-years anywhere in world; Also comments on London Whale, says he doesn’t blame Iksil.


By Jennifer Surane
Bloomberg
August 9, 2017

Jamie Dimon is siding with the bond-market bears.

“I do think that bond prices are high,” the chief executive officer of JPMorgan Chase & Co. said Tuesday in an interview on CNBC. “I’m not going to call it a bubble, but I wouldn’t personally be buying 10-year sovereign debt anywhere around the world.”

The remarks echo a chorus of bears in the Treasury market who say an expanding economy will boost yields as the Federal Reserve increases its benchmark rate. Dimon, 61, didn’t go as far as former Fed Chairman Alan Greenspan, who said last month that the bond market is experiencing an actual bubble, warning that real long-term interest rates are too low to be sustainable. Signs of economic expansion in Europe are also feeding concern fixed-income prices in the region could be headed for a fall.

In the wide-ranging interview Dimon also said he believes his bank has moved beyond the “London Whale” debacle, when JPMorgan traders were accused of hiding more than $6.2 billion in trading losses on wrong-way derivative bets five years ago. Dimon said he doesn’t blame Bruno Iksil, the Frenchman at the center of the case, for the incident. Iksil said last year he wasn’t responsible, and blamed his managers.

Dimon, a member of President Donald Trump’s Strategic and Policy Forum, also said in the interview that he’s not interested in taking a more formal role in politics. The chief executive has been criticized for his support for the president and he’s said he helps Trump because it’s his obligation as a patriot.


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