JPMorgan Suggests Sell Two-Year Treasuries Amid Resilient CPI Outlook

JPMorgan Chase & Co. (JPM) advises selling two-year U.S. Treasuries in a tactical trade, citing a resilient economic outlook that makes aggressive Fed rate cuts unlikely. The median forecast for core CPI in January is 2.5%, with JPM expecting a “firm” 0.39% rise. Traders price a 0.25% cut in July and a potential cut by year-end. The two-year yield held near 3.47% Friday as the CPI report approaches, amid volatility this week. JPM strategists note heightened inflation risk could push the 10-year yield toward 5% quickly, while others, like Greenlight Capital’s David Einhorn, anticipate a more aggressive Fed easing.