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Bond Traders Are Overpricing a Hawkish Fed, JPMorgan’s Kolanovic Says

  • Expects China’s policy pivot to offset some tightening impact
  • Ukraine tensions ‘would likely prompt a dovish reassessment’
Marko Kolanovic
Marko KolanovicSource: Bloomberg

JPMorgan Chase & Co. strategists led by Marko Kolanovic say global markets are pricing in an aggressive wave of monetary tightening this year that’s unlikely to materialize in full -- reinforcing the allure of stocks tied to the economic cycle.

With the Federal Reserve expected to raise interest rates in March for the first time in three years, two-year Treasury yields have spiked more than 80 basis points for the highest level since latr 2019. That’s increasing the competition for global capital and hurting valuations for richly valued assets like technology equities and junk-rated bonds.