J.P. Morgan Asset Management: The magnitude of the Fed's interest rate cut may exceed current market expectations
Iain Stealey, Chief Investment Officer of International Fixed Income at Morgan Asset Management, told Bloomberg that the market's expectation of a 150 basis point rate cut by the Federal Reserve this year is "actually not a lot" based on past rate-cutting cycles. Stealey stated that the Fed has already indicated its desire to ease policy, believing that current policies are restrictive and inflation is declining. "If the yield on 10-year US Treasury bonds falls to 3.5% in the first half of the year and drops even lower in the second half, I would not be surprised," said Stealey. "This depends on data and how inflation evolves according to central bank expectations. If there are signs of weakness in the job market, it could go even lower."
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