US Fixed Income Overview: Beware of policymakers bearing gifts

Research evidence excerpt

US Fixed Income Overview: Beware of policymakers bearing gifts

J P M O R G A N Global Markets Strategy

24 July 2026

US Fixed Income Overview

Beware of policymakers bearing gifts

Fixed Income Strategy

Jay Barry AC

(1-212) 834-4951

john.f.barry@jpmorgan.com

Molly Herckis

• VOTE: Today is the last day to vote in the Extel 2026 Global Fixed Income (1-212)molly.herckis@jpmchase.com622-0899

Research Survey! Please consider supporting J.P. Morgan strategists with your

Liam L Wash vote here

(1-212) 834-5230

• Econ: We look for the Fed to stay on hold next week, but anticipate at least two liam.wash@jpmchase.com

hawkish dissents. We expect only modest changes to the statement and limited J.P. Morgan Securities LLC

forward guidance from Chair Warsh

• Treasuries: We think risks are skewed toward higher yields over the near term,

but with yields near their local highs, we do not like chasing the momentum

with outright duration shorts now. Additionally, investor positioning has been

mixed in recent weeks, therefore in light of these combined factors, we

recommend looking for bearish trades with some relative value; initiate 5s/30s

flatteners. We remain tactically cautious ahead of the FOMC but continue to

favor higher breakevens over the medium term as inflation markets underprice

upside inflation risks; initiate 5Y/10Y/30Y zero-coupon inflation swap

butterflies for belly cheapening

• Interest Rate Derivatives: With the geopolitical backdrop in mind, along with

the FOMC meeting next week, there are reasons to be bullish on volatility, but

the recent repricing in implieds has been in excess of delivered volatility;

remain neutral on volatility. A low volatility environment could mark an

attractive period for carry-seeking strategies, however the recent surge in oil