Tags: Dimon | rates | Fed | QE

JPMorgan's Dimon: 'Rates Are Going to Go Up'

Image: JPMorgan's Dimon: 'Rates Are Going to Go Up'

Wednesday, 12 Jun 2013 10:17 AM

By Dan Weil

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With the 10-year Treasury yield hitting a 14-month high of 2.29 percent Tuesday, more and more experts are predicting the end of the 32-year bull market for bonds.

JPMorgan Chase CEO Jamie Dimon apparently is one of them.

"I think you all should be ready, because rates are going to go up," he told a financial industry conference Tuesday, The New York Times reported.

Editor's Note: The Final Turning Predicted for America. See Proof.

"There is going to be more bond volatility, something we get very nervous about," Dimon added, according to Seeking Alpha.

The Federal Reserve is largely responsible for the last five years of the bond rally, adding more than $2 trillion to its balance sheet through quantitative easing (QE).

But now, Fed officials, including Chairman Ben Bernanke, are making noise that the Fed will taper its QE in the next few months. The Fed is currently buying $85 billion of Treasurys and mortgage-backed securities a month.

"I have a sense at some point later in the year they will have to taper, if only because the budget deficit isn't what it was," Pimco co-Chief Investment Officer Bill Gross told Yahoo.

"Depending on the number, a $600 billion deficit does not allow for $85 billion a month in check writing."

Investors have grown complacent with low interest rates, some experts say. "When past performance has been so consistent, the risk that investors underestimate the risk has consistently been an issue," Richard Ketchum, president of the Financial Industry Regulatory Authority, told The Times.

Scott Minerd, chief investment officer at Guggenheim Partners, told the paper, "There's no doubt we're living through the end of a generational bull market in bonds."

Editor's Note:
The Final Turning Predicted for America. See Proof.

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