J.P. Morgan Sees 25-Basis-Point Rate Hike, Keeps Neutral Stance on U.S. Treasury Duration

J.P. Morgan expects a 25-basis-point interest-rate hike by the Federal Reserve on Wednesday, followed by another one in December. The strategists remain neutral on Treasury duration, finding the front end of the curve valuable but not yet ready to add exposure. They anticipate Treasurys to underperform versus German Bunds, as they remain short Treasurys cross markets versus Bunds. Money markets price in a 60% probability of a 25-basis-point rate hike on Wednesday.