US Treasury Market Daily: Party like it‘s 1999?

Research evidence excerpt

US Treasury Market Daily: Party like it‘s 1999?

J P M O R G A N Global Markets Strategy

25 June 2026

US Treasury Market Daily

Party like it’s 1999?

• Front-end yields fell by 2bp and the broad curve steepened by a similar amount, Fixed Income Strategy

AC despite more positive domestic data, and amid geopolitical headlines Jay Barry

• Given a tightening labor market and firming inflation, many Fed members (1-212)john.f.barry@jpmorgan.com834-4951

have called into question the restrictiveness of the current policy stance.

Various measures of the real neutral rate suggest that, absent a reduction in Jason Hunter AC

(1-212) 270-0034

inflation, a mid-cycle adjustment entailing 50-100bp of tightening in policy jason.x.hunter@jpmorgan.com

rates would be required to re-assert a restrictive stance

Harry Downie

• We examine the two 1990’s-era mid-cycle hiking adjustments analogous to the (1-212) 270-9500

current situation, and find June 1999 through May 2000 to be the better analog harry.j.downie@jpmorgan.com

to today, specifically the tightening phase (November 1999-May 2000) versus Liam L Wash

the initial normalization phase... (1-212) 834-5230

liam.wash@jpmchase.com

• …10-year Treasury yields rose 70bp in this window and the curve flattened Amanda Berke

aggressively, though we find that much of the move followed the (1-212) 834-5739

announcement of a Treasury buyback facility... amanda.berke@jpmorgan.com

• ...This template suggests that the Fed could raise rates by roughly 50-100bp J.P. Morgan Securities LLC

during a mid-cycle adjustment, translating to a roughly 75bp rise in 1y1y OIS.

Using our fair value framework, this implies an additional 50bp rise in

intermediate Treasuries and a 30bp flattening in the 5s/30s curve. Thus, we