JPMorgan Asset Management CIO: US Treasury returns could reach 7%-8% over the next 12 months, with longer-dated bonds offering more value

JPMorgan Asset Management CIO and Global Head of Fixed Income Bob Michele said the US bond market could deliver returns of about 7% to 8% over the next 12 months. He also believes the long end of the US Treasury yield curve offers the most value. Speaking at an event in Singapore, Michele said, "the US Treasury yield curve is approaching 5%," with front-end yields slightly below that level. "So we first expect some price appreciation. After that, you also get the carry." US Treasury prices have risen overall this month. A mix of factors including the selloff in AI-related stocks, the crisis in France and persistent tensions in the Middle East has made US government bonds the preferred safe-haven asset for global investors. The benchmark 10-year US Treasury yield has fallen more than 30 basis points cumulatively since October and is set to end a seven-month streak of increases. Michele said he believes the long end of the US Treasury yield curve offers the most value. He added that the Fed will not raise rates this week but will likely return in December with a hawkish signal. "The Fed will signal it is still in a hiking cycle. Long-term investors will welcome that, because they want the Fed to stay vigilant against economic growth and inflation pressures, and real yields are indeed too high right now," Michele said. JPMorgan Asset Management manages about US$4.6 trillion in assets. Last month, Michele said his team had begun buying long-dated bonds in the US, Japan and Australia, calling their prices "just too cheap" and declaring that the market had reached a "peak of pain." A Bloomberg index tracking US Treasury returns is down 0.9% so far in 2026, after gains in each of the previous three years.