JPM Daily Credit Strategy Update: The 10s30s spread curve should flatten post Fed though outflows a growing risk too; HG Spotlight published

Research evidence excerpt

JPM Daily Credit Strategy Update: The 10s30s spread curve should flatten post Fed though outflows a growing risk too; HG Spotlight published

Nathaniel Rosenbaum, CFA AC (1-212) 834-2370 Pavan D Talreja, CFA (1-212) 834-2051 North America Credit Research J P M O R G A Nnathaniel.rosenbaum@jpmorgan.com pavan.talreja@jpmchase.com

J.P. Morgan Securities LLC J.P. Morgan Securities LLC 30 July 2026

Silvi Mantri (1-212) 834-7239

silvi.mantri@jpmchase.com

J.P. Morgan Securities LLC

JPM Daily Credit Strategy Update

The 10s30s spread curve should flatten post Fed though outflows a growing risk too; HG

Spotlight published

The Fed was bound to surprise one way or the other given the market was pricing in a 31% chance of a hike up until yesterday

morning and indeed they did with a ‘hawkish hold’. Our US economist Michael Feroli published his thoughts here: The FOMC

voted 9-3 to leave rates on hold, an outcome close to expectations. The statement was almost unchanged relative to the June

meeting. In Warsh’s press conference, he once again failed to specify how he intended to achieve his stridently asserted inflation

resolve. He also cast doubt on whether PCE inflation will remain the Fed’s inflation target in the medium run. Both of these points

raise questions about the new chair’s credibility in delivering lower inflation. We believe this will add some urgency for the rest

of the committee to act on its mandate. We are pulling forward our next rate hike from 2H27 to December this year, with

policy rates on hold at 3.75-4.0% thereafter. September is clearly a risk if inflation heats up again soon. We wouldn’t

characterize this revision as the market “pressuring” the Fed, but rather another challenge prompting the Fed to act to maintain its

credibility.