U.S. Treasury Secretary Responds to Bond Market Collapse Warnings

After several heavyweight figures in the financial sector repeatedly issued warnings about a potential collapse in the U.S. bond market, U.S. Treasury Secretary Besent publicly stated on June 1 that "U.S. Treasuries will never default," in an effort to ease the rising market concerns.

In an interview with CBS, Besent emphasized that the U.S. government is near its fiscal limit but "we are close to the warning line, yet will not hit that wall." These remarks directly addressed recent concerns from Wall Street executives about U.S. debt risks, particularly the strong warnings from JPMorgan Chase CEO Jamie Dimon.

Wall Street Giants Warn of Impending Debt Crisis

According to The Australian Financial Review, Jamie Dimon recently stated at the Reagan National Economic Forum in Simi Valley, California, that the U.S. government and Federal Reserve have "overdone it" in terms of fiscal spending and quantitative easing policies, and that the bond market will "eventually crack." He made it clear that while it is uncertain whether the crisis will erupt in half a year or six years, "perhaps we need it to wake us up," otherwise the trajectory of U.S. debt will be difficult to reverse.

The Financial Times also quoted Dimon's speech, explicitly stating that the U.S. debt market is under immense pressure and "could collapse" amidst rising debt.

Wall Street Executives Issue Warnings in Unison

Jamie Dimon is not alone; Goldman Sachs President John Waldron also stated at the Bernstein Strategic Decisions Conference last week that bond market risks have replaced tariffs as the main macroeconomic uncertainty. He pointed out, "The debates over the U.S. government's budget and fiscal status are the real core risks."

A week before Waldron's remarks, the yield on U.S. 30-year Treasury bonds had risen to nearly a 20-year high, reflecting the market's increasing concern about long-term debt risks. At this time, President Trump was aggressively promoting a tax bill, described as a "big and beautiful" legislative push, promising tax cuts for certain groups, but potentially further inflating the deficit.

Unconventional Measures Risk Being Depleted

Currently, the U.S. government's statutory debt limit stands at $36.1 trillion, which was reached in January 2025. Since then, the Treasury has relied on "extraordinary measures" to support daily spending and avoid default.

Besent warned as early as May 9 that these emergency measures might run out by August, and without congressional legislation to raise the debt ceiling, the U.S. government will face a real debt repayment crisis.

Simultaneously, international rating agencies have reacted. After Standard & Poor's and Fitch both downgraded their ratings, Moody’s also announced last month that it was lowering the U.S. sovereign credit rating, signaling a consensus among the three major rating agencies in warning about the sustainability of U.S. finances.

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