Jamie Dimon says Congress shouldn’t play with US government’s credit rating

Jamie Dimon says Congress shouldn’t play with US government’s credit rating

Jamie Dimon, President, CEO & Chairman of JP Morgan Chase, speaks about the Squawk Box at the WEF in Davos, Switzerland, on January 19, 2023.

Adam Galika | CNBC

JPMorgan Chase CEO Jamie Dimon said Thursday that politicians should get serious about the debt ceiling as Congress remains embroiled in a political battle to raise the US borrowing limit.

“We should never question the creditworthiness of the United States government. This 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 at a standoff over the debt ceiling, the amount of money the US is allowed to borrow to pay its bills. Treasury Secretary Janet Yellen said last week that a US debt default “would irreparably damage the US economy, the livelihoods of all Americans and global financial stability.”

Today, Dimon said, “Of course the Democrats will blame the Republicans and the Republicans will blame the Democrats. I don’t care who blames whom. Even questioning it is wrong. … That’s just part of the financial structure of the world. It shouldn’t be played with at all.”

The current cap is around $31.4 trillion. Because the cost of government business exceeds federal tax revenues, the US must raise money by selling Treasury bonds, but cannot do so beyond the mandated debt ceiling.

A US default would send shockwaves across US and global economies, including market volatility and government benefit freezes.

In terms of the broader economy, Dimon said inflation is likely to remain stubbornly high, forcing the Federal Reserve to hike interest rates above 5%.

— CNBC’s Greg Iacurci contributed to the coverage.

Correction: Treasury Secretary Janet Yellen said last week that a US debt default “would irreparably damage the US economy, the livelihoods of all Americans and global financial stability.” A previous version mischaracterized her comments.