JPMorgan: The Fed's interest rate cut may exceed 150 basis points

J.P. Morgan Asset Management believes that if the US economy enters a recession, the extent of rate cuts by the Federal Reserve may far exceed the current market forecast of 150 basis points, thereby driving up short-term US bond prices. They stated that J.P. Morgan Asset Management is buying 5-year, 7-year, and 10-year US Treasury bonds while reducing holdings of 30-year bonds because they believe that Fed rate cuts will result in a steeper yield curve. Goran stated that J.P. Morgan Asset Management's fundamental forecast for the US economy remains a soft landing but cannot completely rule out the possibility of an economic recession, which provides convincing reasons to hold US Treasury bonds. He predicts that as the Fed eases monetary policy, benchmark 10-year US bond yields could decrease by approximately 50 basis points from their current level to around 3.50%.