Alex Roever is joined by Srini Ramaswamy, Fabio Bassi, and Jay Barry to discuss the outlook for US and developed market interest rates in 2022. They discuss the relative differences in central bank reaction functions and the resulting impact on yields. Notably, the ECB is set to further expand its balance sheet expansion in 2022, but we forecast 10-year bund yields rising to -15bp and the curve steepening by 2Q22. The BoE is likely to raise rates next month and twice in 2022, pushing 10-year gilt yields to 1.15% by mi...
Alex Roever is joined by Srini Ramaswamy, Fabio Bassi, and Jay Barry to discuss the outlook for US and developed market interest rates in 2022. They discuss the relative differences in central bank reaction functions and the resulting impact on yields. Notably, the ECB is set to further expand its balance sheet expansion in 2022, but we forecast 10-year bund yields rising to -15bp and the curve steepening by 2Q22. The BoE is likely to raise rates next month and twice in 2022, pushing 10-year gilt yields to 1.15% by mid-year. We envision above-trend growth and a Fed on the move pushing 10-year yields to 2% by mid-2022. Fed tapering and bank leverage constraints will likely lead to slower deposit growth and demand for Treasuries in 2022. We envision volatility rising in 2022, supported by an active Fed and rising longer-term rates.
This podcast was recorded on November 30, 2021.
This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-3931469-0, www.jpmm.com/research/content/GPS-3931940-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2021 JPMorgan Chase & Co. All rights reserved.
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