JPMorgan Asset Management Says Fed Should Not Hike Rates; Opposes Bessent's Long-Bond Buy Plan

The Quick Take

• JPMorgan Asset Management's EMEA chief market strategist Karen Ward argues the Fed should not hike rates
• Ward also discussed Scott Bessent's pledge to increase Treasury purchases of long-dated bonds
• The commentary comes as markets debate whether sticky inflation requires further Fed tightening or whether easing can proceed

JPMorgan Asset Management's EMEA chief market strategist Karen Ward publicly opposing further Federal Reserve rate hikes marks a significant inflection point in Wall Street's rate debate. Ward's position — delivered on Bloomberg TV — represents one of the most credible institutional voices arguing that the current rate level is already restrictive enough and that additional tightening would damage the labour market and economic growth without materially advancing the disinflation goal. The backdrop for her statement includes ongoing debate about whether the Fed should respond to any re-acceleration in inflation data with rate hikes.

Ward also discussed Scott Bessent's pledge to increase Treasury purchases of long-dated bonds, a policy designed to reduce term premium and ease financial conditions without cutting the overnight rate. If the Treasury actively buys long-dated bonds, it effectively compresses yields at the long end, reducing the effectiveness of the Fed's tight monetary stance — creating a potential policy conflict between the Treasury and the Federal Reserve. For bond market investors, this dynamic adds complexity to duration positioning and yield curve trades, particularly around 10-year and 30-year Treasuries.

The key market variable is whether the Fed's next meeting produces language that explicitly rules out rate hikes versus language that keeps the door open. JPMorgan AM's public stance is a clear positioning signal for investors managing fixed income allocations. Equity markets, particularly rate-sensitive sectors like tech and real estate, would benefit from clarity that rate hikes are off the table. Investors should watch the next Fed communication window — minutes, speeches, and the September FOMC meeting — for resolution of the ongoing policy debate that Karen Ward is now publicly entering.

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