‘It will become a problem': Jamie Dimon says America's $39 trillion debt will mean volatile markets and rising rates

Jamie Dimon, CEO of JPMorgan Chase, cautioned on NPR's Newsmakers podcast this week that the country's $39 trillion debt is heading somewhere bad. He just can't tell you exactly when it'll become a real problem (1).

"I think we should work on it," Dimon said, referring to the debt (1). "But I don't know — and again, I don't think anyone can predict — does it become a real problem in six months, six years? I don't know. I do know it will become a problem."

Dimon believes problematic debt will look like volatile markets, an increase in interest rates, and the people who normally buy U.S. government debt — the bond investors who fund everything from military spending to Social Security checks — will start asking for more return before they'll lend.

The technical term for those investors is "bond vigilantes." If the government's borrowing becomes more expensive because these investors are pushing back, the higher rates will affect the job market and the whole economy.

"The way it would exhibit itself is volatile markets, rates going up… bond vigilantes, people not wanting to buy United States Treasuries," Dimon said. "The U.S. will still be the best economy, but they'll not want to own U.S. Treasuries (1)".

Right now, the U.S. pays more than $1 trillion a year just in interest on its debt (2) — and that figure is expected to double in the next ten years, according to the Congressional Budget Office.

To put that in perspective, the entire federal government spent about $7 trillion in 2025, which also means that the government now spends 20% of every tax dollar collected just to pay the interest on previous debt.

Read More: How to apply Dave Ramsey’s 7 Baby Steps to your own life

Dimon also pointed to the one time the U.S. had a real shot at fixing this problem and didn't.

Back in 2010, President Barack Obama created a bipartisan commission to tackle the bloating national debt. It was called the Simpson-Bowles Commission (3), named after its two co-chairs, Republican Senator Alan Simpson and Democrat Erskine Bowles.

The commission put together a plan to cut discretionary spending, reform the tax code, and reshape healthcare costs. It was detailed and politically painful enough that both sides had something to hate about it.

But Congress couldn't reach a consensus, so they didn't pass it.

"Years ago, we had a solution, the Simpson-Bowles Commission. It didn't get done," Dimon said (1). "I wish it had gotten done. It would have been a home run for all Americans, and it would have resolved some of these issues."

Instead, the U.S. keeps running an annual budget deficit, where the government spends more than it collects in taxes each year.

A big part of the problem is that most federal spending isn't optional.

Of the roughly $7 trillion the government spent in 2025, it spent about $4.2 trillion on mandatory outlays.

Mandatory outlays are the money the federal government pays out that are required by law, like Medicare, Medicaid and Social Security, to cover healthcare and retirement income for tens of millions of Americans (2).

Dimon describes these spendings as being "set in stone." You can't just cut it without taking away benefits that people have paid into for decades and are currently depending on to survive.

That leaves the remaining $2.8 trillion, that's already stretched across defense, education, infrastructure, and everything else, as the only flexible part of the budget. And $1 trillion of that is now going straight to interest payments.

Both parties know this. That's part of what frustrates Dimon. He's been walking the halls of Congress for years and says almost everyone he talks to understands the math.

"Neither Democrats nor Republicans have really focused on this for a while," he said (1). "It's just we haven't had the will yet to actually deal with it".

Economists track how much the U.S. owes, and how that debt compares to the size of the economy.

The current debt-to-GDP ratio is around 123% (4), which means the country owes roughly $1.23 for every $1 it produces in a year..

Think of it like a household that earns $100,000 a year but carries $123,000 in debt. It's manageable, as long as that household keeps their interest rates low, and their income keeps growing.

Dimon believes the U.S. should focus on growing their income rather than cutting budgets. He says the U.S. should be aiming for 3% annual GDP growth — not the roughly 2% it's been averaging.

"If we grew at 3% and not 2%… the debt to GDP would start going down," he said (1). "This is the most innovative nation the world's ever seen, and so I think we should focus a little bit on that to solve the problem too, not just raise taxes or cut expenditures".

He's bullish on America's capacity to grow. But, he's also honest that growth alone probably isn't enough, and that the political will for a comprehensive fix still isn't there.

Dimon isn't predicting an economic crash. He's trying to warn policymakers and the public that the debt is building up slowly but steadily.

With that in mind, here's what it could mean for you:

If bond investors start demanding higher returns to hold U.S. debt, interest rates across the board tend to rise with them. That means mortgage rates, car loans, credit card rates — all of it gets more expensive. If you're carrying variable-rate debt, or planning to take on new debt in the next few years, that's something to watch closely.

For investors, higher rates are generally bad news for stock prices. Dimon himself noted that "interest rates are like gravity to almost all asset prices" — when rates go up, valuations tend to come down (5).

The honest answer is that nobody knows when any of this happens. Not Dimon, not the Fed, not the economists watching the numbers. What Dimon is saying is that the longer Washington waits, the worse the eventual adjustment will be — and that "crisis management," as he puts it, is a much harder way to solve a problem than dealing with it before it explodes.

Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

YouTube (1); Congressional Budget Office (2); Tax Policy Center (3); USA Debt Now (4); Yahoo Finance (5)

This article originally appeared on Moneywise.com under the title: ‘It will become a problem': Jamie Dimon says America's $39 trillion debt will mean volatile markets and rising rates

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.