JPMorgan Asset Management said that the Fed will cut interest rates as soon as September, and the conditions are ripe for US bonds to rise.
Bonds are poised to strengthen as inflation hits an "inflection point" and the economy heads toward recession, said Jason Davis, rates portfolio manager at JPMorgan Asset Management.
The company manages $2.5 trillion in assets.
He expects the 10-year U.S. Treasury yield to fall toward 3 percent in the coming months, before dropping to around 2.5 percent after the Fed cut rates.
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