Jamie Dimon's dual stock and bond market warning: Investors already acted on one of the two calls
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- Jamie Dimon said in a Monday CNBC interview that stocks are at prices he "wouldn't touch" and that he would not buy long-dated Treasuries, arguing the 10-year yield should sit at 4% to 4.5%.
- The 10-year Treasury is currently yielding 4.6% and has risen for most of the year as traders shifted from pricing in Fed rate cuts to pricing in possible hikes against an uncertain inflation outlook.
- iShares 0-3 Month Treasury Bond ETF (SGOV) absorbed $47.5 billion in net inflows year-to-date, making it the highest-flow bond ETF and the third-largest bond ETF overall at roughly $100 billion in assets.
- U.S. equity ETFs captured nearly half of the $1 trillion-plus in total U.S. ETF assets at the mid-year mark, even as bond allocations concentrated in ultra-short-duration products rather than broad-market bond funds.
- Vanguard Total Bond Market ETF (BND) and iShares Core US Aggregate Bond ETF (AGG) remain the two largest bond ETFs by assets, but SGOV and BND are the only fixed-income funds ranked in the top 10 ETFs for net flows over the past year.
- Warren Buffett endorsed the same short-Treasuries posture in his 2013 Berkshire Hathaway shareholder letter, saying his wife's estate would sit 90% in the S&P 500 and 10% in short-term Treasuries.
Why it matters: The classic "flight to safety" trade has compressed into the very front end of the Treasury curve: investors aren't reaching for the 10-year hedge Dimon is dismissing, they're parking cash in 0-3 month bills, with $47.5 billion flooding into SGOV alone. With the 10-year already above Dimon's 4-4.5% comfort zone at 4.6%, the bond half of his warning is largely priced in — leaving the equity call as the unresolved risk.
