JPM Cuts 10Y Yield Forecasts “Significantly Lower” Due To Weaker Inflation Outlook

Just one day after Goldman reluctantly cut its 2017 year end forecast on the 10Y yield last Friday from 3.00% to 2.75%, “reflecting some added uncertainty on the US macro outlook” while conceded that “bond bears”, i.e., those clients who have listened to it, “have had a difficult 2017″ it was JPMorgan’s turn, and over the weekend JPM announced it was adjusting its US rate forecast “significantly lower”, slashing its year end 10Y yield target to 2.75% from 3%, reflecting ‘a weaker outlook on core inflation and reduced expectations around tax reform and infrastructure spending.’
In the note by JPM’s Jay Barry, the bank also trimmed most other tenor forecasts by 15bp-35bp lower, saying that the inflation outlook ‘has changed markedly’ over past month based on weakness in core CPI in March and April. JPM also said that as for fiscal stimulus, odds are rising that it ‘gets pushed into FY18.’

This post was published at Zero Hedge on May 22, 2017.