J.P.Morgan Mark Yield Forecasts Higher

J.P.Morgan note that “given the adjustments we’ve made to our Fed forecast, we also revise to our interest rate forecast to reflect this more hawkish reality. Similar to the prior round of revisions, the front end bears the bulk of these revisions higher, reflecting a Fed funds rate which moves more deeply into restrictive territory. As before, given that underlying growth dynamics for the U.S. economy are little changed on the supply side, and that our view on neutral policy rates have not changed materially, our new forecast reflects a more deeply inverted Treasury curve. Specifically, we now project 2-Year and 10-Year yields will top out around 4.45% and 3.75%, respectively, 20bp and 15bp higher than our prior projections.”