Jamie Dimon, President, CEO & Chairman of JP Morgan Chase, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 19th, 2023.
Adam Galica | CNBC
“We should never question the creditworthiness of the United States government. That is sacrosanct. It should never happen,” Dimon said Thursday on CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland.
His comments come as Congress remains in a standoff over the debt ceiling, the amount of money the U.S. is authorized to borrow to pay its bills. Treasury Secretary Janet Yellen said last week that the U.S. would likely hit the ceiling Thursday, saying the event would “cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”
Today, Dimon said, “Of course Democrats will blame the Republicans and Republicans will blame the Democrats. I don’t care who blames who. Even questioning it is the wrong thing to do… That is just a part of the financial structure of the world. This is not something you should be playing games with at all.”
The current ceiling is about $31.4 trillion. Since the cost of government operations exceeds federal tax revenues, the U.S. must raise money by selling Treasury bonds, but can’t do so beyond the mandated debt ceiling.
A U.S. default would send shock waves throughout the U.S. and global economies, including market volatility and frozen federal benefits.
On the broader economy, Dimon said inflation will likely remain stubbornly elevated, forcing the Federal Reserve to raise interest rates higher than 5%.
— CNBC’s Greg Iacurci contributed reporting.