Dimon, who was interviewed on stage at the Reagan National Economic Forum in Simi Valley, Calif., prompted some market jitters during Friday’s sideways trading session.

Asked if he thought so-called “bond vigilantes” that sell U.S. Treasuries due to worries about growing deficits have returned, Dimon replied “Yeah.” The bank executive pointed to trillions of dollars in borrowing and spending in the wake of the Covid-19 pandemic, which he described as “huge sums of money, and we don’t really know the full effect of that.”

“You are going to see a crack in the bond market,” Dimon said. “It is going to happen. And I tell this to my regulators, some of you who are in this room, I’m telling you it’s going to happen, and you’re going to panic.”

“I’m not gonna panic,” he added. “We’ll be fine. We’ll probably make more money, and then some of my friends will tell me ‘We like crises because it’s good for JPMorgan Chase.’ Not really.”

Government debt has been in focus after the U.S. lost its last perfect Aaa rating earlier this month when Moody’s downgraded U.S. sovereign debt to AA+. The yield on the 30-year Treasury note jumped 0.25 percentage point in May, its largest one-month gain since December, according to Dow Jones Market Data. It set a 52-week high north of 5% on May 21.

Dimon also warned of the “enemy within” in the U.S., calling for a unified front and fixes to things like permitting, regulations, immigration, taxation, schools, and healthcare, among other issues. But he argued the most important issue was maintaining military alliances and the strongest military in the world.

“If we are not the preeminent military and the preeminent economy in 40 years, we will not be the reserve currency,” Dimon said. “That’s a fact. Just read history.”

He said the U.S. has to “get our act together, and we have to do it very quickly.”

He also weighed in on the Trump administration’s Bitcoin efforts to amass large quantities of the cryptocurrency and the U.S. dollar’s current status as the world’s reserve currency.

“We shouldn’t be stockpiling Bitcoin,” Dimon said. “We should be stockpiling guns, bullets, tanks, planes, drones, you know, rare earths.”

Write to Connor Smith at connor.smith@barrons.com