JPMorgan: Investors significantly raise future Interest Rate expectations, widening the yield spread of US bonds.

On January 7th, Jinshi Data, Morgan Stanley analysts stated in a report that investors have significantly raised their expectations for future Intrerest Rates in the United States and no longer expect Intrerest Rates to decline further. The analyst said, "The expectation for a 3% federal fund Intrerest Rate by the end of 2025 has now become 4%." With the improvement of the US economy, the longer-term government bond yields have shown a noticeable rise in Intrerest Rate expectations. The analyst stated that the spread between 2-year and 10-year yields widened to the highest level since 2022. Tradeweb data shows that the 10-year US Treasury yield is 4.63%, the 2-year yield is 4.27%, with a spread of 36 basis points.