J.P. Morgan on US Rates: Two More Hikes, 10Y to 5.05% — Neutral Duration

Eben@CANSLIM Research's avatarEben@CANSLIM Research

J.P. Morgan expects the Federal Reserve to hike rates twice more in 2026, in September and December, taking the funds rate target range to 4.00-4.25%. The bank has raised its year-end 2026 targets for 2-year and 10-year Treasury yields to 4.70% and 5.05% respectively, and expects yields to hold near those levels into the first half of 2027. Despite optically attractive front-end valuations, the bank is not adding duration exposure, keeping a neutral outright stance while holding 10s/20s/30s belly-cheapening butterflies.

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