J.P.Morgan Mark Yield Forecasts Lower

Late on Thursday J.P.Morgan wrote “our economics team now forecasts the first Fed cut will occur at the June FOMC meeting, and looks for 5 cuts next year, compared with July and 4 cuts previously.”

• “Given that we expect more easing to come earlier next year, we lower our yield targets across the curve.”
• “We expect the biggest impact will be felt at the front end, where we lower our YE24 targets by 25bp to 3.25%, reflecting the high degree of passthrough from medium-term policy expectations to short-end Treasury yields. Meanwhile, we also lower our 10-year forecast by a more modest 10bp to 3.65%, reflecting the traditional sensitivity of long-term yields to shifts in policy expectations.”