If the U.S. defaults on its debt, the JPMorgan CEO warned in a Thursday interview with Bloomberg TV, it would hit contracts, collateral, clearing houses, and affect clients definitely around the world.

Dimon expressed some hope that the U.S. would be able to negotiate a solution if markets begin to worry that a default might happen. The closer you get to it, you will have panic in terms of market volatility, he warned. And while panic becomes something thats not good, he noted, if it gets to that panic point, people have to react.

Dimon revealed to Bloomberg that JPMorgan is convening a weekly war room to evaluate the effects of a U.S. default. He predicted that the group would start meeting more regularly if the standoff continues, moving to daily meetings by around May 21 and then to meeting three times a day if no solution is reached.

U.S. president Joe Biden and Congressional leaders met earlier this week to find a solution to the impasse over the debt ceiling. Republicans in the U.S House of Representatives want deep spending cuts in exchange for letting the government borrow more money to pay its commitments, while the Biden administration has called for a debt ceiling increase free of other conditions before negotiating on spending. 

Biden and congressional leaders are scheduled to meet again next week. 

What is the debt ceiling?

Congress sets a ceiling on how much debt the U.S. Treasury can incur, and can pass legislation that increases the borrowing cap by a given amount. If the ceiling is reached, the Treasury is barred from borrowing more money to cover the spending obligations of the U.S. government. That would force the Treasury to stop paying for things the U.S. government has already committed to pay, leading to a default. 

White House economists warn that even a short default would lead to 500,000 lost jobs and a 0.6% reduction in GDP. 

As the U.S. approaches the ceiling, the U.S. Treasury can employ extraordinary measures to keep covering its spending obligations and give Congress more time to raise the debt ceiling. (These include moves such as pausing some investments in savings plans for government workers and health plans for retired postal employees.) The Treasury started conducting extraordinary measures in January, and estimates it could exhaust its options as early as June 1.

U.S. Secretary of the Treasury Janet Yellen has warned of the economic consequences of the U.S. default, calling it an economic and financial catastrophe that will be of our own making on ABC News on Sunday.

Yellen is reportedly calling CEOs to warn them of the debt ceilings fights consequences. On Bloomberg, Dimon refused to confirm whether he had spoken to Yellen. But the Treasury Secretary will meet with board members of the Bank Policy Institute, a lobbying group chaired by Dimon, next week.

Dimon told Bloomberg that he was concerned that a protracted debt ceiling fight would hurt the U.S.s credit ratings, referring to a previous debate over raising the debt ceiling in 2011. After months of back-and-forth, the Obama administration and House Republicans agreed to raise the debt ceiling while cutting government spending, on the same day Treasury predicted it would exhaust its borrowing authority. Soon after, rating agencies Standard & Poors downgraded its rating for U.S. debt to AA+.

Banking crisis

JPMorgans CEO also referred to another source of economic angst in his interview with Bloomberg: the current crisis facing regional banks. 

Dimon, whose company recently acquired the failed First Republic Bank, said he wasnt interested in buying another faltering financial institution. Were going to have a lot of blowback having bought [First Republic], he said, even if it was the right thing to do.

Its a lot of work, he said.

The town hall Wednesday was the first major television event of the 2024 presidential campaign, and CNN defended its decision to hold it as a chance to put Trump in front of a wider audience, outside of the conservative media bubble he has largely kept to since early in his presidency.

Critics said the event, which was staged in front of Republicans and unaffiliated voters who were expected to vote in the GOP primary, instead turned into a Trump campaign rally and allowed him to repeat longstanding falsehoods while dodging difficult questions

Tom Jones, a senior writer at the media research institute Poynter, said he had favored the idea of CNN holding the town hall at St. Anselm College in New Hampshire. But he said he was surprised by the conduct of the audience, which he had expected to be more neutral.

Instead, the crowd gave Trump a standing ovation when he walked onstage, applauded some of his most provocative comments and laughed at many of his quips, including when he criticized E. Jean Carroll, the advice columnist who accused him of raping her in 1996 and this week won a $5 million judgment against him.

Jones said the atmosphere put CNNs moderator, Kaitlan Collins, in an almost impossible position as she tried to elicit straightforward answers from Trump and fact-check his comments about the Jan. 6 storming of the Capitol by his supporters and the 2020 election, which he still falsely insists he won.

Whenever she might have had him cornered, he was built up by the audience, Jones said. It just emboldened him. He realized, I can do or say anything I want, and she got steamrolled at that point through no fault of her own. It was her against the entire room.

The event was indicative of the new era of leadership at CNN and managements efforts to lure back viewers who turned to Fox News and other conservative outlets over the past decade.

At a Thursday morning meeting at CNN, Chairman and CEO Chris Licht praised Collins masterful performance, saying she asked tough questions in difficult circumstances.

If someone was going to ask tough questions and have that messy conversation, that damn well should be on CNN, he said in a recording of the meeting obtained by The Associated Press.

He also defended the decision to hold the town hall before a Trump-friendly crowd.

While we all may have been uncomfortable hearing people clapping, that was also an important part of the story, because the people in that audience represent a large swath of America, Licht said. And the mistake the media made in the past is ignoring that those people exist. Just like you cannot ignore that President Trump exists.

The event did widen CNNs audience, at least for a night. Nielson said the town hall averaged 3.3 million viewers, compared to the 707,000 who tuned in to CNN during the same time slot a night earlier.

But Jones said he was skeptical that the town hall would help CNNs reputation in the long term, given the backlash. He noted that most of the networks post-event commentary was highly critical of Trump, likely alienating conservative viewers who had tuned in just to watch the former president.

Nick Arama, a writer for the conservative website RedState.com, criticized CNNs Gary Tuchman, who spoke with some of the audience members after Trumps appearance, saying he didnt act as much like a moderator trying to get their opinion as a Democratic propagandist trying to impose his own opinion on them.

Meanwhile, critics from the left were unsparing, saying CNN should have predicted how chaotic the event would be.

CNN should be ashamed of themselves. They have lost total control of this town hall to again be manipulated into platforming election disinformation, defenses of Jan. 6th and a public attack on a sexual abuse victim. The audience is cheering him on and laughing at the host, Democratic Rep. Alexandria Ocasio-Cortez, of New York, wrote in a tweet.

Frank Sesno, a former CNN Washington bureau chief now at George Washington University, said the event was a harbinger of the difficult coverage decisions every news organization needs to wrestle with because Donald Trump is not a normal candidate.

You cant ignore him, but you cant give him carte blanche either, he said.

A one-on-one interview would have been preferable, though whether Trump would have agreed to that is a different question, said Sesno, who added that he saw value in allowing Trump to speak to a broader audience, including many people who might have mostly tuned him out in recent years.

Sesno noted that although Trump supporters delighted in his performance, Republican critics, including New Hampshire Gov. Chris Sununu, seized on it to to press their concerns about the former presidents ability to win a national election.

As chaotic and weird as the event was, I as a journalist think its important for people to see this, he said.

A notice of appeal was filed Thursday in Manhattan federal court, the first step in a process that will move the civil case brought against Trump by writer E. Jean Carroll to a three-judge panel of the 2nd U.S. Circuit Court of Appeals.

The notice was signed by Trump attorney Joe Tacopina, who said after Tuesdays verdict that he believed there were multiple strong grounds for appeal.

The nine-person jury concluded after less than three hours of deliberations that Carroll had failed to prove it was more likely than not that Trump had raped her in the dressing room of a Bergdorf Goodman store in early spring 1996. But it did find that she had been sexually abused.

It also said in its verdict that Trump defamed Carroll in a social media statement last October.

Carroll sued Trump in November minutes after a temporary New York state law took effect allowing sexual attack victims to sue their abusers even if the abuse occurred decades earlier.

In the notice of appeal filed in the lower court Thursday where Judge Lewis A. Kaplan presided over the trial, Trumps lawyers wrote that notice is hereby given that Defendant Donald J. Trump appeals to the 2nd Circuit.

Asked for comment, Tacopina said in an email: Judge Kaplan has been overturned once already in Carroll v. Trump. We are confident it will be twice after this appeal is heard.

He was referencing Kaplans rejection of an attempt to substitute the United States for Trump as the defendant in an earlier defamation lawsuit filed by Carroll for statements Trump made while he was president. The 2nd Circuit later ruled that Trump was an employee of the government for purposes of the lawsuit, but the appeal has not been fully resolved.

A lawyer for Carroll did not immediately respond to messages seeking comment.

The verdict was returned after a two-week trial in which Carroll testified that Trump sexually attacked her in the luxury department stores dressing room after a lighthearted and flirtatious chance encounter that took them from the stores entrance to the desolate sixth floor lingerie area, where Trump invited Carroll to help him shop for a gift.

She first publicly disclosed her experience in a 2019 memoir while Trump was still president. She said his public response was so harsh that it spoiled her reputation, cost her a 27-year job with Elle magazine and subjected her to mean social media attacks from his followers.

Trump, who is currently running for president as a Republican, did not attend the trial. He said he didnt know Carroll, that he never encountered her at the department store, and he has repeatedly hurled insults at her, including at a videotaped deposition in October. Portions of that were played for the jury.

He repeated some of his harsh statements during a CNN town hall on Wednesday night.

Outside the courthouse on Tuesday, Tacopina said that he and Trump were very confident on the appellate issues here.

He said one of the issues to be appealed was the inclusion in the trial of the notorious 2005 Access Hollywood video in which Trump was captured on a hot mic speaking disparagingly about women and saying that celebrities can grab women sexually without asking because women let them do it.

There were things that happened in this case that were beyond the pale, Tacopina said.