Jamie Dimon, the JPMorgan Chase & Co. chief executive officer, speaking at the Aspen Institute’s 25th Annual Summer Celebration Gala on Saturday gave some interesting comments that long-term investors could do well by taking note of.

He said: “I think rates should be 4 percent today. You’d better be prepared to deal with rates 5 percent or higher. It’s a higher probability than most people think.”

His rather surprising comments come at a moment that concerns about rising prices appear in fact to be ebbing somewhat.

It’s a fact that, at least so far this year, the 3 percent yield level for the 10-year Treasury appears providing stiff resistance.  

Last week, the 10-year Treasury yield touched the 3 percent only once on Wednesday, August 1, which was before on Friday, August 3, when the level of the U.S. jobless rate dipped to 3.9 percent from 4 percent before while the U.S. economy (GDP) advanced at an annualized 4.1 percent quarter-on-quarter during the second quarter, which was well above an upwardly revised 2.2 percent expansion in the first quarter and that was, by the way, the strongest growth rate since the third quarter of 2014 thanks to higher consumer spending and soybean exports and notwithstanding business spending slowed.

All this happened at a moment that the Treasury Department announced the federal government plans to borrow $329 billion in the current July-September quarter, which is the highest third-quarter figure in eight years, as the government faces rising borrowing needs due to higher budget deficits.

The projected borrowing is 74 percent higher than in the same quarter a year ago and would mark the largest July-September amount since 2010, which is without any doubt a “rare” surge in “late cycle borrowing” and could be one of the reasons why the 5-year U.S. break-even rate, a gauge of inflation expectations, has moved lower to about 2.12 percent, which is down from this year’s high on May 9 of 2.18 percent.

The Trump administration announced on July 19 its midsession budget review that it expects this year's deficit to rise to $890 billion and climb further to $1.1 trillion in 2019.

In my view, Jamie Dimon is right when he says that he thinks rates should be at 4 percent today and we’d better be prepared to deal with rates of 5 percent or higher. All this could play out over a time span of “more or less” a couple of years.

Mr. Dimon concluded: “The current bull market could actually go for 2 or 3 more years because the economy is still doing quite well, and markets usually turn right before the economy does.”

If things turn out that way, that will not be supportive at all for the already “overpriced” equity markets and we have still some way to go…

Investors must remember that the key remains that markets are in uncharted territory as the Federal Reserve and other central banks plan to raise rates and tighten monetary policy more than anticipated.

There is the real possibility that growth and inflation could prove fast enough to prompt the Fed to hike more than anticipated amid the continuous increase in financing needs by the U.S. Treasury.

Etienne "Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.