JP Morgan noted on Monday that it is confirming its view of lower UST yield in H2 this year, citing
- disinflation,
- the potential from a Federal Open Market Committee (FOMC) policy error,
- the risk of 'rollover' in spending by consumers,
- the risk of rollover in the jobs market.
“We continue to believe that US 10-year bond yield has peaked at 4.2%, a call we made last October”
- “We believe that yields are more likely to move lower in 2H from current levels, rather than higher. There is further evidence that we are moving into a disinflation phase,"
- "In addition, there is a potential for a policy mistake, keeping the yield curve strongly inverted, and a risk of a rollover in consumer spending and labor markets, each of which could bring yields down in 2H of this year.”
- “Our FI team has 3.5% end year target.”
