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JPMorgan Flags Twin Risks to Investment-Grade Bond Rally

JPMorgan Asset Management's bullish view on the high-grade corporate bond rally faces two potential risks: escalating technology spending and declining retail participation.

Kay Herr, chief investment officer of U.S. GFICC at JPMorgan Asset Management, highlighted concerns about the sustainability of the current credit rally amid broader market turbulence. Government bond yields have climbed sharply globally, with U.S. 30-year yields reaching levels not seen since 2007.

Portfolio managers across major firms are reassessing positioning as rate-cut expectations fade and some market participants price in potential Federal Reserve tightening. The shift intensified selling pressure across bond markets from Japan to North America.

Fixed income strategists say the Fed's communication about its policy path remains critical as investors navigate heightened uncertainty in credit markets.