Name: Bond market outlook is good this year but duration matters, says JPMorgan's Priya Misra
Uploaded: 2026-01-02T12:02:52+00:00
Duration: 305 s

Speakers

Priya Misra — Portfolio Manager, J.P. Morgan Asset Management

Summary

Priya Misra, fixed income portfolio manager at JPMorgan Asset Management, discusses the bond market outlook for 2026. She expects a good year for bonds, with the Fed cutting two more times, but emphasizes that duration and credit risk selection will matter. She sees front-end rates moving lower if the Fed cuts, while the long end stays anchored in a 3.75-4.25% range. Credit spreads are tight but still offer value, with sector selection depending on AI-related supply, free cash flow, and leverage.

Priya Misra expects a good bond market outlook for 2026.
Fed base case: two more rate cuts, less than last year, data-dependent.
Labor market is key; unemployment rate is preferred indicator.
Credit is priced for perfection but still offers value.
Front-end rates can fall if Fed cuts; long end likely anchored.
10-year Treasury yield expected in 3.75-4.25% range in soft landing.
AI-related supply, free cash flow, and leverage are key for credit sector selection.
Tariffs and fiscal policy remain macro uncertainties.

Ideas

Priya Misra Portfolio Manager, J.P. Morgan Asset Management 1:36

Value remains in corporate credit.

Credit is priced for perfection, but spreads are tight and there is still value in credit. The speaker will watch AI-related supply, free cash flow, profitability, and leverage to determine which sectors to overweight.

Priya Misra Portfolio Manager, J.P. Morgan Asset Management 1:53

Good bond market outlook this year.

Overall bond market outlook is good this year. The bond market was resilient in 2025 despite tariffs, Fed independence concerns, and the sell-America theme. With the easy rate cuts done, the focus shifts to the labor market; the base case is two more Fed cuts by year-end, less than last year. Credit spreads are tight but there is value, so the overall bond market still offers a good outlook, though investors must manage duration and credit risk carefully.

Priya Misra Portfolio Manager, J.P. Morgan Asset Management 4:20

Long-end yields anchored, range-bound.

The long end is driven by the deficit. No additional fiscal spending is expected, and the curve has already steepened, giving investors more compensation to extend duration. The speaker does not expect much more steepening; the long end should stay anchored with the 10-year yield in a 3.75-4.25% range in a soft-landing scenario. If the economy slows, long-end yields can fall, providing capital gains.

Priya Misra Portfolio Manager, J.P. Morgan Asset Management 4:36

Fed cuts will lower front-end yields.

The Fed only controls the front end. With the base case of two more rate cuts this year, front-end rates can move lower. So front-end Treasuries should benefit from Fed easing.

Bond market outlook is good this year but duration matters, says JPMorgan's Priya Misra

Summary

Ideas

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