JPMorgan CEO Jamie Dimon issues warning on debt ceiling 'panic'

Amy Morgan Chase CEO Jamie Diamond is warning lawmakers about the risk of debt ceiling brinkmanship in an interview with punch bowl news is the ball diamond warrants about causing panic in the market saying quote people panic and when you see people panic that's 08 09 again and that's really what you want to avoid in quote joining us now as the person who conducted that interview Brandon Peterson Peterson excuse me author of punch bowl news is newest newsletter the ball take us through some of the takeaways that you had from your interview with Jamie Diamond. Thanks so much for having me. When I spoke with Jamie Diamond the first thing I asked about was the debt limit because for Congress that's still the biggest story in town right now. And he was pretty adamant. This does feel a little bit different this time around that the politics are a little bit more pitched. He said that there is a higher chance that Congress makes a mistake here whether or not that is allowing a full default of the government's debt or just getting so close that like you said markets begin to panic. Obviously there's a lot of political reasons for that Kevin McCarthy has a much smaller margin of control in the house than John Boehner did during similar episodes in 2011.

And so you have to wonder whether or not he's going to be able to get any kind of debt ceiling raising bill through his chamber that doesn't have all these conservative wish list items like the limit save and grow act did which passed out of the chamber earlier this month. What we just wait to see. Brent and I want to pick up on that point you made about Jamie Diamond saying look it's not just about getting past the X date it's about the expectation or the risk of even getting to that date and you talk about the potential mistake in terms of the politics of all this. I want to point to another quote here from your interview with him on the default itself he says think of it in two pieces the run up to a default and an actual default it's even bad to have the run up to default because that can question American debt ratings. I mean do you get the sense that he thinks that damage has already been done. That is a really good question for him in particular I think he would say no not yet. I think when you're thinking about stuff like the ratings that American debt gets from fitches and moody's and SMP at the standard and poor obviously like we're still triple a debt right now but even fitches and I think other ratings agencies have said this to they are getting more and more concerned about the impact that they have on the debt limit.

Simply put political dysfunction has on on the debt limit debate and just the the status of American finance right if we got to the point where investors were genuinely concerned that those payments on on treasuries interest would not go be disseminated out to the rest of the financial system. And that is the mother of all liquidity crises right we're not there yet but I think honestly if Congress keeps doing this song and dance. I don't blame them the credit rating agencies for beginning to wonder just how sustainable this is. I think that's partly why when President Joe Biden last night started talking about the fourth 14th amendment a little bit that line that says the public debt shall not be questioned. That gave markets a little bit of hope right because maybe there's an administrative run around on this but we're not there yet. That's a pretty optimistic outlook though right when you think about what we heard from the president as well as leader Kevin McCarthy yesterday doesn't feel like there was a whole lot achieved in that discussion. I realize those weren't the White House doesn't want to characterize that as negotiations but punchball news obviously right in the center of those negotiations seeing the back and forth.

What's your sense right now about how close we're going to get up to that. I mean we're already pretty close is the thing. I mean when you're talking about the legislative timetables in place and if we're talking about a June 1 ish ex date. Obviously there's a little bit of flexibility built into that figure but we are already at the finish line right now. And so if there are going to be movement is that if there is going to be any progress and whether you call it negotiations or whatever it has to happen really quickly. It has to happen this week. Thankfully we do know that staffers from Speaker McCarthy's office and the White House are at a meeting today in Speaker McCarthy's office.

I just walked over from the lobby outside. Those conversations are happening. We don't exactly know how well they're going and then we're going to have another principles meeting with McCarthy and Biden on Friday. As soon as that happens we'll know just how likely a deal is going to be. I think for right now it's a lot of waiting and wondering which is probably why markets haven't quite lost their minds. If we get to the point of after this week where there's no deal I think it's fair to be able to wonder how the markets are going to react and how quickly they might go haywire. Yeah it could be some more choppiness ahead for us.

Brandon Peterson punchball news. It's good to have you on today. I appreciate the time.

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