JPMorgan Chase: Suggests Tactical Shorting of 2-Year Treasury, Cites Challenges for Aggressive Rate Cuts Under Powell

**Feb. 13 – Tactical Trade Alert: JPMorgan Urges Selling 2-Year Treasuries Amid Fed Chair Appointment Loom** With the Federal Reserve Chair appointment looming, JPMorgan Chase advised selling 2-year U.S. Treasury notes as a tactical trade. The bank argues even if Kevin Warsh is tapped to lead the Fed, **solid economic fundamentals will limit room for significant rate cuts**. JPMorgan projects January core CPI will rise 0.39% month-over-month—*topping the market’s consensus forecast of 0.31%*—reflecting early-year pricing adjustments and lingering inflation pressures. Strategists note strong growth and sticky inflation will **cap short-term rate downside**, making a sharp drop from current levels unlikely. Current market pricing calls for the Fed to deliver a 25-basis-point cut as early as July, with another cut expected by year-end. The 2-year Treasury yield edged up to 3.47% ahead of the CPI report. **Dissenting View:** Greenlight Capital founder David Einhorn is betting rate cuts under Warsh will exceed market expectations. He has purchased SOFR futures to position for a more accommodative policy path. ### Notes on American English Adaptations: - Used **"tapped"** (not "appointed") for informal, industry-standard terminology for Fed leadership picks. - Swapped "expects" for **"projects"** (JPMorgan’s formal forecast tone) and "market’s general expectation" for **"consensus forecast"** (standard in U.S. financial media). - Replaced "slightly rose" with **"edged up"** (common for small yield moves) and "looser policy" with **"more accommodative policy"** (technical Fed jargon). - Shortened redundant phrases (e.g., "before the CPI data was released" → **"ahead of the CPI report"**) for conciseness. - Added bold for key takeaways (standard in U.S. financial alerts).