Jay Barry and Molly Herckis, head of US interest rate strategy at J.P. Morgan Chase, wrote in a report dated July 31 that they will advance the forecast for when the next Fed will raise interest rates from the second half of 2027 to December of this year, and expect the policy interest rate to remain unchanged in the 3.75%-4.0% range thereafter. The report said that if inflation heats up again soon, there is also a risk of interest rate hikes in September. “We expect the US unemployment rate to rise slightly to 4.3% in July, and 75,000 new non-farm payrolls.” Federal Reserve Chairman Walsh's speech showed that the balance sheet policy may play a greater role, the 2% inflation target promise may weaken, and the risk that the yield curve will further steep is rising. It is proposed to establish a 2-year/10-year treasury bond yield curve steeper transaction. J.P. Morgan also raised the US 10-year Treasury yield forecast for the end of 2026 from 4.70% to 4.85%, and raised the 30-year Treasury yield target from 5.20% to 5.40%. The bank said that this move mainly reflects its renewed optimism about break-even inflation and that the term premium is expected to rise.

Jay Barry and Molly Herckis, head of US interest rate strategy at J.P. Morgan Chase, wrote in a report dated July 31 that they will advance the forecast for when the next Fed will raise interest rates from the second half of 2027 to December of this year, and expect the policy interest rate to remain unchanged in the 3.75%-4.0% range thereafter. The report said that if inflation heats up again soon, there is also a risk of interest rate hikes in September. “We expect the US unemployment rate to rise slightly to 4.3% in July, and 75,000 new non-farm payrolls.” Federal Reserve Chairman Walsh's speech showed that the balance sheet policy may play a greater role, the 2% inflation target promise may weaken, and the risk of a further sharp bearish yield curve on the yield curve is rising. It is proposed to establish a 2-year/10-year treasury bond yield curve steeper transaction. J.P. Morgan also raised the US 10-year Treasury yield forecast for the end of 2026 from 4.70% to 4.85%, and raised the 30-year Treasury yield target from 5.20% to 5.40%. The bank said that this move mainly reflects its renewed optimism about break-even inflation and that the term premium is expected to rise.