With the national debt surging past $36.2 trillion in early June and long-term yields climbing, the U.S. bond market is entering dangerous territory.
Leading financial voices are now raising alarms over unsustainable federal deficits, rising interest costs and declining confidence in the national debt.
The rout in Treasuries that began in April has pushed 30-year yields near 5%, levels last seen during the 2023 debt-ceiling standoff and comparable to pre-2008 highs.
Analysts say this reflects investors’ demand for a higher term premium—the extra yield needed to hold longer-term debt in a riskier fiscal environment.
The key question now: Are we witnessing the early stages of a full-blown U.S. government debt crisis, or has the bond-market panic already gone too far?
Here’s what the top names are saying.
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Jamie Dimon: “You’re Going to See A Crack In The Bond Market”
JPMorgan Chase CEO Jamie Dimon said the U.S. economy is on a fragile foundation of excessive borrowing and loose monetary policy.
According to Dimon, a bond market panic is not just possible—it’s inevitable.
“You’re going to see a crack in the bond market. It’s going to happen,” Dimon said last week at the Reagan National Defense Forum.
Dimon blamed the post-pandemic policy response for sowing instability, citing $10 trillion in fiscal stimulus since 2020 and an additional $8 trillion in asset purchases by the Federal Reserve.
He indicated that this flood of liquidity inflated asset prices and reduced the system’s ability to handle stress.
“Unfortunately, it may be that we need [a crisis] to wake us up.”
Read also: Jamie Dimon Warns Of Bond Market Crisis Caused By US Debt Binge: ‘You’re Going To Panic’
BlackRock: “Staying Underweight Long-Term US Treasuries”
In a June 2 weekly commentary, BlackRock’s Investment Institute reaffirmed its cautious stance on U.S. Treasurys. Jean Boivin, head of the group, said investor appetite for long-dated bonds is fading.
“Our strongest conviction has been staying underweight long-term U.S. Treasuries. We maintain that view as concerns about the deficit mount,” the world’s largest asset manager wrote in the report.
The firm projects the U.S. deficit-to-GDP ratio could hit 5%-7%, especially if current spending proposals advance.
“We’re watching to see if these changes impact foreign investors and drive term premium even higher,” analysts said.
Long-dated U.S. Treasuries, as tracked via the iShares 20+ Year Treasury Bond ETF TLT, have fallen 3% year-to-date, on track for the fifth straight year of losses.
Ray Dalio: “Unsustainable Debt Levels” Could Lead To Crisis
The Bridgewater Associates founder continues to express pessimism about the U.S. fiscal trajectory. On Monday, he warned that global debt has reached a dangerous level.
“The current debt levels in the U.S. and around the world are unsustainable.”
Ray Dalio called for an “analytical way” to tackle the debt crisis. In a tweet last month, he projected the U.S. deficit would reach 7.5% of GDP in 2025 and pressed for urgent fiscal reform.
“If we don’t cut that to 3% of GDP, we’re likely to face a significant debt crisis in the next few years.”
David Stockman: “A Big Ugly Bomb”
Former Reagan budget director David Stockman slammed the Trump administration’s fiscal package, calling the so-called “Big Beautiful Bill” a “Big Ugly Bomb” that will blow future deficits wide open.
“The latest CBO baseline amounts to a five-alarm dumpster fire.”
According to Stockman, if current policy continues unchecked, the federal deficit will approach $3 trillion annually by 2035, and the national debt will surge from $37 trillion to over $58 trillion in just 10 years.
He blamed structural issues—such as automatic spending on entitlements and defense—for locking the U.S. into a dangerous fiscal trajectory.
Brennan Schlagbaum (Budgetdog): “This Is Going to Be Disastrous for Families”
CPA and financial educator Brennan Schlagbaum, widely followed online as Budgetdog, outlined the impact on everyday Americans.
“The government owes $36 trillion… and needs to refinance $9 trillion this year.” He said the market is demanding an over 5% interest to buy that debt, and neither of the government’s likely responses—raising rates further or printing money—offer a good outcome.
“If nothing changes by 2034, interest payments will hit $2.2 trillion. That’s a financial heart attack.”
He warned of ripple effects across the economy, including job losses, soaring taxes, and risks to Social Security and Medicare.
“The US is going full speed towards a debt crisis,” the expert warned.
Photo: Shutterstock
