Analysts at J.P. Morgan Chase said in the report that investors have greatly raised their expectations for future US interest rates and no longer expect interest rates to fall further sharply. “The previous expectation of a 3% federal funds rate by the end of 2025 is now 4%,” the analyst said. As the US economy improved, the yield on longer-term treasury bonds rose markedly as interest rate expectations rose. The spread between 2-year and 10-year yields widened to its biggest level since 2022, analysts said. According to Tradeweb data, the 10-year US Treasury yield was 4.63%, the 2-year term was 4.27%, and the spread was 36 basis points.

Analysts at J.P. Morgan Chase said in the report that investors have greatly raised their expectations for future US interest rates and no longer expect interest rates to fall further sharply. “The previous expectation of a 3% federal funds rate by the end of 2025 is now 4%,” the analyst said. As the US economy improved, the yield on longer-term treasury bonds rose markedly as interest rate expectations rose. The spread between 2-year and 10-year yields widened to its biggest level since 2022, analysts said. According to Tradeweb data, the 10-year US Treasury yield was 4.63%, the 2-year term was 4.27%, and the spread was 36 basis points.