JPMorgan Advises Closing 10Y-30Y Treasury Curve Trade Ahead of CPI and Fed Chair Warsh's Congressional Testimony

According to JPMorgan Chase strategists, on July 14, investors should close out positions in 10-year-to-30-year U.S. Treasury curve-flattening trades ahead of the CPI release and Fed Chair Warsh's first congressional testimony to manage event risk. Short-end Treasury yields rose 6 basis points while the yield curve flattened 3 basis points, driven by escalating geopolitical tensions and hawkish remarks from Federal Reserve officials.

Fed Governor Christopher Waller expressed concern that elevated inflation could become embedded in market inflation expectations. Waller indicated that if the upcoming CPI data continues to show strong core inflation pressure, the Federal Reserve will need to consider tightening monetary policy in the near term.