J.P. Morgan Rates strategists Jay Barry and Liam Wash discuss the current rates outlook, risks to the view, and what we can glean from past episodes of Fed mid-cycle hiking campaigns. Speakers Jay Barry - Head of Global Rates Strategy Liam Wash – US Rates Strategy This podcast was recorded on 26 June 2026. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5348644-0 https://www.jpmm.com/research/content/GPS-5348215-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase &amp; Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P. Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.

US Rates: Life, Liberty, and the pursuit of hawkishness

At Any Rate

# Full Transcript

**Podcast:** At Any Rate

## Transcript

You're listening to At Any Rate, J.P. Morgan's Global Research Podcast, where we take a look at the story behind some of the biggest trends and themes in fixed income, currency, and commodity markets today. I'm your host, Jay Barry, head of global rate strategy at J.P. Morgan. And today I'm joined by my colleague, Liam Wash, who is a US rate strategist. So we are recording this podcast on Friday, June 26. And it's interesting, it's been a relatively quiet week from the data perspective.

And after Chair Warsh's hawkish debut at the FOMC meeting last week, yields have declined and we've actually priced in a little bit less Fed tightening. So we think this is a perfect opportunity to take a look at what's happening in US rates markets to see if we can draw any parallels with any other times during the modern monetary policy era. And I thought no one better to talk about it with me today than Liam. So Liam, thanks for joining. Yes, thanks, Jay, for having me. Jay, before we dig in, what's the latest views on rates markets? Now, I'm glad you asked, Liam.

So I think when we wrote our mid-year outlook last week, we made the case that we are currently in an environment where an upward slope to the money market curve makes sense. And that makes sense, particularly in the context of the news that we had out of the FOMC meeting a week and a half ago. Further from that, I would say that when we look at our valuation frameworks, intermediate yields are flagging as too low as well.

Ten-year yields in our fair value framework currently appear about 25 to 30 basis points too low, given how the markets are priced for medium-term Fed policy, growth and inflation expectations, and the size of the Fed's balance sheet. And that's a pretty large deviation. It is the largest we've actually seen since just after the wake of the regional banking crisis in the spring of 2023.

So all in, this would tell me alongside what we've talked about, about the justification for an upward slope to the OIS curve, that there is some risks that rates should reverse and move higher over the near term. But I guess the question is what could be the catalyst, and we do have two big catalysts next week.

The first is that Chair Warsh will appear on a panel at the ECB's Cintra Conference alongside ECB President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklin. But I do wonder whether the chair will actually say anything new there, particularly because he said very little with respect to the Fed's reaction function or his own views on monetary policy at the meeting a week and a half ago. And there's been little data in the interim to change that.

But the second and the bigger potential game changer for the Treasury market and the U.S. rates market more broadly is the unemployment rate, which the unemployment report, which comes out on Thursday. And that's meaningful because, you know, we've always fou...

US Rates: Life, Liberty, and the pursuit of hawkishness

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US Rates: Life, Liberty, and the pursuit of hawkishness

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Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.