J.P.Morgan Take Profit On 2-Year Longs

J.P.Morgan note that "2-Year Treasury yields have declined 15bp from their local highs at the end of last week, but even now, OIS forwards continue to price Fed liftoff by late-summer 2022 and about 45bp of tightening by YE22. We continue to forecast Fed liftoff in early 2023, and given current market pricing, it is tempting to hold onto our front-end longs. However, we are cognisant that Chair Powell did leave the door open for an earlier hiking cycle yesterday, in contrast to the dovish pushback from his fellow central bank presidents in Australia, the UK, and the EU in recent days. Thus, we recommend taking profits on 2-Year Treasuries at current levels."