Download Preparing for Rising Rates

December 2016
Preparing for Rising Rates
Many clients with exposure to fixed income securities are asking how they should prepare for a rising U.S.
interest rate environment. We have a constructive view on U.S. economic growth for 2017, and as a result,
we believe the Federal Reserve will continue the rate normalization process it began in December 2015.
We recognize that short-term and long-term interest rates
have already risen due to fading disinflationary fears on
the back of improved growth and an increase in policy
uncertainty in the United States after the recent election.
While we don’t see a sustained rise in U.S. rates from here,
we believe we could still see a more significant period of price
movement in U.S. bond markets. Similar to what we wrote
in June 2015, we believe this is an opportunity to carefully
evaluate fixed income holdings.
In this piece, as we did previously, we briefly touch on
liquidity risk—that is, the ability to quickly convert a bond
into cash by selling without dramatically affecting its price—
which has become a more meaningful consideration since
the financial crisis.
Positioning your portfolio in a rising rate
environment
IN BRIEF
•We believe we will see an ongoing recovery in the
U.S. economy in 2017, and a Federal Reserve (Fed)
that continues normalizing rates.
•As a result of better growth prospects and fading
disinflationary forces, we could see significant
movement in prices for U.S. bond markets.
•Even a small increase in interest rates can lead
to portfolio losses.
•The changing landscape creates potential
opportunities and challenges in the fixed
income markets.
•Diversify to minimize fixed income interest rate
and credit risk.
•Avoid surprises; know what you own.
As the economic cycle shifts and markets evolve, new risks
and opportunities could emerge that may require you to
evaluate your fixed income holdings to ensure that your
allocations are aligned with your risk tolerance and goals.
What follows is a refreshed summary of our perspective on
the implications of rising rates for fixed income investors,
particularly for clients who hold fixed income positions
outside of actively managed portfolios.
INVESTMENT PRODUCTS ARE:
NOT FDIC INSURED • NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, JPMORGAN CHASE BANK, N.A. OR ANY OF
ITS AFFILIATES • SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED
This material is for informational purposes only, and is not an offer or solicitation to enter into a transaction. The views and strategies described in the
material may not be appropriate for all individuals. Past performance and outlooks are never a guarantee of future results. Please read definitions, risk and
tax considerations, and other important information at the end of this document.
2 | PREPARING FOR RISING U.S. RATES
We also offer a brief overview of liquidity, and why we believe
it’s a key consideration when thinking about investing in
individual bonds or adding bond funds to an investment
portfolio. Your personal circumstances and goals should
dictate the best course for you.
Our thoughts on the direction of interest rates
For some time, interest rates in the United States had been
on a declining trend. Since the credit crisis began to unfold
in 2007, the Federal Reserve has kept short-term rates
artificially low to stimulate the U.S. economy, increasing rates
only once, in December 2015. Now that the economy is on
more solid footing, and some of the disinflationary shocks
have faded, the Fed will likely resume the normalization
cycle.
We believe the Fed will increase the Federal Funds rate
(the short-term interest rate at which banks lend balances
to each other overnight) in December and continue the
normalization process in 2017. While we have already
experienced a rise in both short- and long-term interest
rates in the United States this year, we don’t consider
another sustained rise in rates as likely, mainly due to our
view that economic growth remains secularly low and
We anticipate a moderate rise in
rates in 2017
The table shows our rate outlook for U.S.
Treasury bonds of various maturities for
year-end 2017, as well as current and yearend 2015 rates.* The column on the far
right shows the hypothetical change in basis
points from today to year-end 2017 (a basis
point is the equivalent of 0.01%—or 1/100th
of a percent).
inflation remains well contained. At the same time, central
bank policy in Europe and Japan is expected to keep global
yields low for the foreseeable future. Consequently, certain
global investors, such as central banks and foreign insurance
companies looking to buy high-quality developed market
bonds, may likely find attractive relative value in U.S. fixed
income versus other markets.
Even so, we recognize that uncertainty has increased
following the recent U.S. presidential election, and for that
reason we consider it prudent to take a close and careful
look at how your fixed income allocation is positioned.
Interest rates and bond prices: Interest rates are one of
the biggest drivers of bond prices. As interest rates rise,
the value of a high-quality bond or bond fund falls, and
vice versa.
U.S.
TREASURIES
YEAR-END 2015
RATE
NOVEMBER 21,
2016 RATE
2017 YEAR-END
RATE OUTLOOK
HYPOTHETICAL
CHANGE
2-Year
1.05%
1.07%
1.50%
+0.43%
5-Year
1.76%
1.78%
2.00%
+0.22%
10-Year
2.27%
2.32%
2.50%
+0.18%
30-Year
3.02%
2.99%
3.00%
+0.01%
Source: J.P. Morgan Private Bank.
*Rate outlook is as of November 2016. Subject to change.
Data shown is for informational purposes only and is not a guarantee of future results.
| 3
Our view on investing in fixed income
Our portfolio managers have implemented additional
measures for our actively managed fixed income portfolios1—
Interest rate risk
Compared to the last 30 years, we believe you need to think
differently about how you invest in fixed income, due both to
an anticipated turn in the interest rate cycle, and changing
characteristics of the markets and available options. Interest
rates are one of the biggest drivers of bond prices, and while
it has taken longer than we expected, the approaching period
of rising rates will likely cause the value of bonds and bond
funds to fall.
such as expanded counterparty coverage, improved
information systems to better assess liquidity and maximizing
our access to bond dealers—to enhance our ability to
navigate an environment of lower liquidity. These portfolios
also take full advantage of the continuous research of our
credit analysts. Strategies managed by third-parties are also
subject to our ongoing due diligence.
Liquidity risk
The 2007–2008 financial crisis raised important questions
about liquidity in fixed income markets. While the global
banking system is safer than it has been in the past, it is
our view that there is generally less liquidity in fixed income
markets today than before the financial crisis, both in the
United States and abroad. The changing liquidity picture may
create additional volatility in bond prices, especially in times of
stress.
For clients who oversee their fixed income allocations
themselves on a self-directed basis, we can help you
assess the liquidity of the bonds you own. For a better
understanding of liquidity dynamics in the fixed income
marketplace, refer to “A primer on bond liquidity.”
Liquidity: Liquidity is the ability to quickly convert a bond
into cash (sell) without dramatically affecting its price.
Liquidity is a dynamic feature of bond investing that can
change abruptly in response to supply, demand and other
market forces.
One of the main reasons for this trend is that structural
changes in the marketplace have made it more difficult for
dealers to carry inventory or conduct market-making activity.
As a result, dealers have shifted from a principal-based
business model (taking securities in inventory and selling
them later) to an agency model (primarily matching buyers
and sellers), and are less able to serve as a buffer during times
of market volatility.
1
Bank products and services, including certain discretionary investment management products and services, are offered by JPMorgan Chase Bank, N.A.
and its affiliates.
4 | PREPARING FOR RISING U.S. RATES
A primer on bond liquidity
When evaluating a bond for purchase, you should
consider its liquidity characteristics, along with other
factors, such as interest rate risk and credit risk. In
the current environment, we believe it is important
to understand how liquidity may impact your bond
investments.
What do we mean by liquidity? Liquidity is the ability to
quickly convert a bond into cash (sell) without dramatically
affecting its price. Liquidity is a dynamic feature of bond
investing that can change abruptly in response to supply,
demand and other market forces. A surplus of sellers of
a given bond may either cause a delay in selling, or widen
bid and ask spreads that could lead to a large discount in
its price.
How do we assess liquidity? Several factors affect
a bond’s liquidity (see table below). These factors can
help determine whether a particular bond is a good fit
in an overall portfolio and if it is suitable for your time
horizon and risk tolerance. When you need immediate
access to your funds at any time, you should keep in
mind that lower credit quality bonds, such as high yield
and distressed debt, are generally less liquid than higherquality bonds. In most markets, like U.S. Treasuries, new
issues are generally more liquid than securities that
have been issued years before. As a general rule, “buyand-hold” investors who expect to keep their bonds to
maturity are impacted less than short-term or tradingoriented investors who expect to be able to sell bonds
whenever they want.
FACTOR
GREATER LIQUIDITY
LESSER LIQUIDITY
Outstanding issue size
Larger
Smaller
Number of market makers
Greater
Lesser
Trading volume
Higher
Lower
Bid/Offer spreads
Tighter
Wider
Quote sizes
Larger
Smaller
Credit quality
Higher
Lower
Demand
Greater
Lesser
Dealer balance sheet
Larger
Smaller
Why does liquidity matter?
Liquidity matters because it can affect a bond’s price or the ability to sell a bond at any given moment. One way to
measure liquidity is the bid and offer spreads. During periods of low volatility, the bond bid and offer spread is relatively
small; during periods of higher volatility or market stress, bond prices can fluctuate dramatically. As with any asset,
many investors would like to be able to sell a bond when they want to, without being forced to sell at a discount. If that
flexibility is less important, you should be adequately compensated for the risk of that inconvenience.
In some situations, a bond’s illiquidity may offer a benefit. If you are a buy-and-hold investor, and liquidity is not a
priority, you may prefer to sacrifice liquidity for the potential compensation associated with holding illiquid bonds.
Periods of market illiquidity may also be seen as opportunities to buy good assets at discounted prices.
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If you own core bonds or bond funds
Core investment-grade bonds are an important
component of diversified portfolios, but bear in
mind that as interest rates rise, bond prices will fall.
As mentioned previously, we believe the Fed will continue
normalizing short-term interest rates in 2017. If you buy (or
bought) fixed rate, investment-grade bonds and intend to hold
them until they mature, rising U.S. rates won’t have any effect
on the income you receive. You will continue to earn or accrue
interest at the rate expected when the bond was bought.
However, when U.S. interest rates rise, and if you need to sell
a bond before it matures, be aware that the value may have
declined and you may incur a loss.
In contrast to individual bonds, bond mutual funds don’t have
a final maturity, and therefore provide no assurance that your
full principal will be returned. Depending on the composition
of a mutual fund, the total return may go down as rates rise.
Total return: A crucial measure of performance, it
represents your interest income plus your capital gains
or losses.
Despite our belief that U.S. interest rates will rise, core bond
holdings remain an important component of diversified
multi-asset portfolios. Core bonds are often the anchor of a
portfolio when equity markets are volatile. If you buy these
securities in a rising rate environment, keep an eye on total
return, and be prepared to experience capital losses as bond
values fall.
What this means for core bond or bond
fund holders
• Understand the potential risks of bond and bond
fund investments, including, among others, interest
rate, credit, inflation and liquidity risks.
• Bonds, especially high-quality bonds and funds that
invest in them, are sensitive to changes in interest
rates.
•Consider total return, not just current yields.
•Core bond holdings are still an important part of a
diversified portfolio.
•Consider investing in floating-rate bonds.
While you may enjoy higher income on new bonds purchased
when rates rise, the value of bonds purchased at an earlier
date will fall. Fund managers actively monitor interest rates
and manage against those losses, but it may take time for
mutual fund portfolios to reflect the new higher rate regime.
In some cases, the manager may be limited to the kinds of
bonds (e.g., maturities and qualities) that can be purchased.
Alternatively, clients can consider discretionary core bond
portfolios in a separately managed account (SMA), with the
ability to customize around yield or maturity targets.
•If a temporary jump in longer-term interest rates
occurs (as a result of speculation and fear rather
than market fundamentals such as demand,
inflation or credit risk), and you prefer to maintain
control of your investment portfolio, you may look
to buy longer-dated bonds to lock in those higher
market rates. This is particularly relevant if you are
an income-focused, long-term investor.
6 | PREPARING FOR RISING U.S. RATES
If you are a U.S. investor and own municipal bonds
or municipal bond funds
Municipal bonds and bond funds are also subject
to interest rate risk. Tax advantages may make
municipal income more attractive relative to highgrade corporate bonds, offering a cushion against
What is laddering?
Laddering refers to a portfolio of bonds whose maturities
are spread out over a certain period of time, such that a
portion of the portfolio will mature each year.
rising interest rates. We suggest tax-sensitive U.S.
investors implement municipal exposure through
laddered strategies to help reduce interest rate risk.
Many of our clients invest in the municipal bond market
due, in part, to their historically low correlation to stocks.
Unlike taxable government and corporate bonds, the
interest earned on most municipal bonds is exempt from
federal and, in some cases, state income taxes for U.S.
investors. Moreover, the interest income generated by
municipal bonds is not subject to the 3.8% Medicare
Contribution Tax on unearned income, which took effect in
January 2013.
Municipal bonds may at times be more attractive than
corporate bonds of similar quality on an after-tax basis. In
order to make a relevant comparison between the two, it is
important to be aware of tax-equivalent yields.
Tax-equivalent yield: Municipal bonds offer lower yields
due to their tax-exempt status. The tax-equivalent yield is
the yield you would have to earn on a taxable bond
investment to equal the
yield of a comparable tax-free municipal bond.
Tax-Equivalent Yield = Tax-Free Municipal Bond Yield
1 - (Tax Rate)
In today’s municipal bond market, we recommend a
“laddered” approach for high-quality municipal bond
portfolios.
We believe that laddered bond portfolios, held to maturity,
serve a dual purpose, as they help insulate the portfolio
from interest rate and reinvestment risk, while generating
a predictable income stream.
A ladder can be implemented as a pure “buy and hold”
strategy in self-directed (brokerage) accounts, or as a
managed ladder with some active trading.
On a tactical basis, for brokerage accounts, we may
suggest individual bonds that have longer durations if we
see an interesting market opportunity.
What this means for municipal bond or
municipal bond fund holders
• Some tax-sensitive investors tend to overweight
their portfolios with municipal bonds. While tax
advantages are important, so is diversification across
bond sectors to help reduce risk and volatility.
• A s with all bond holdings, complementing a core
municipal bond portfolio with other types of fixed
income and investment styles, such as international
bonds or high-quality corporate bonds, may
provide more income, reduce interest rate risk, and
increase the probability of higher total returns in an
environment where we think interest rates could rise.
| 7
If you own high yield bonds or bond funds
High yield bonds provide diversification and
potentially higher yields. Depending on your
investment goals and risk tolerance, you may wish
to consider an allocation to high yield bonds as a
component of your overall portfolio.
The U.S. high yield bond market2 has had a remarkable ride
over the last few years. With energy companies comprising
18% of the index in 2014, volatility in oil prices led to a
negative 5% return in 2015, and the subsequent recovery in
oil prices has driven high yield returns to double digits thus far
in 2016.
As oil prices have recovered, distress ratios in the market
have decreased. Distress ratios are important because higher
ratios typically signal an increase in credit stress.
At current valuations, we feel that investors are fairly
compensated for default risk going forward, with yields on the
high yield index2 at 5.5% over Treasuries, and we believe that
high yield bonds still may make sense in a diversified fixed
income portfolio.
In addition to interest rates, credit quality also affects risk.
High yield bonds may offer a higher yield than government
bonds, for example, but you must be willing to accept a
greater risk of default.
The high yield market should benefit from the improvement in
U.S. growth, as most high yield issuers are U.S. focused.
Credit or default risk: Relates to the probability that a
borrower (the bond issuer) will default on its debt obligations.
Investors typically demand more yield for greater perceived
risk.
2
Refers to JP Morgan domestic HY index, which is designed to mirror the
investable universe of the U.S. dollar high yield corporate debt market.
U.S. high yield distress ratios have fallen
Percentage of Par
90
80
U.S. HY Distress Ratio
HY Energy Distress Ratio
70
60
50
40
30
20
10
0
2000 2002 2004 2006 2008 2010 2012 2014 2016
Source: Deutsche Bank. Data as of October 31, 2016.
What this means for high yield bond or high
yield bond fund holders
• We believe that it may make sense to own high yield
bonds in a diversified fixed income portfolio for two
reasons: higher yields and muted expected defaults.
• While bond defaults would affect the value of a high
yield investment, we believe that you are currently being
compensated adequately for this risk.
• Given the historical performance of high yield credit
spreads (the yield advantage higher-risk bonds offer
investors) in rising rate environments, and our view
of modestly rising longer-term U.S. interest rates and
below-average expected defaults, we are comfortable
holding some high yield fixed income bonds in
diversified portfolios in 2017.
8 | PREPARING FOR RISING U.S. RATES
If you own U.S. dollar emerging market
bonds or bond funds
U.S. dollar-denominated emerging market
bonds may provide higher yields and increased
diversification for investors. The market for these
bonds has both matured and greatly expanded in
the past decade. For example, the emerging market
corporate bond market is now about $1.6 trillion
in size, larger than the U.S. high yield market at
$1.3 trillion. These bonds or bond funds may be
Many emerging market countries do not appear as vulnerable
as they did prior to the “taper tantrum” in 2013, as some
currencies have adjusted and we have seen pro-market
regimes take over in countries such as Brazil and Argentina.
But with the new U.S. administration set to take office,
uncertainty has increased for some emerging markets,
especially those that featured prominently in the campaign
discussions, and could drive risk premia higher across
emerging markets in the near term as policy details emerge.
appropriate if you understand the asset class and
wish to be compensated for assuming higher risk.
Much like the high yield market, emerging market bonds
experienced a high degree of volatility during the financial
crisis. In fact, from 2007 to the end of 2008, the “spread” or
yield over U.S. Treasuries of the emerging markets sovereign
and corporate bond indices jumped from about 1.5% over
U.S. Treasuries to between 9% and 10% over U.S. Treasuries,
before recovering in 2009. Today, these emerging market
bond indices pay between 3.5% and 4% over U.S. Treasuries.
As the Fed begins to normalize rates, and especially if the
U.S. dollar continues to strengthen against emerging market
currencies, we could see elevated volatility in emerging
markets. That said, for some investors, these spreads over
U.S. Treasuries may represent a compelling investment
opportunity.
In addition to interest rate risk, U.S. dollar-denominated
emerging market bonds are often subject to two levels of
credit risk, including country- and company-specific risk. For
example, a Mexican sovereign bond has Mexico risk, while
bonds issued by a Mexico manufacturer have sovereignand company-specific risk. You should be aware of these
additional risk factors.
What this means for emerging market bond
or bond fund holders
• Exposure to a mix of U.S. dollar-denominated emerging
market bonds may be advantageous in a portfolio
setting, especially those originating in countries and
companies that are benefiting from the current macro
economic environment.
• We believe that it is prudent to focus on security
selection and higher credit quality of emerging market
sovereigns and corporations.
| 9
If you own bank preferred stock
Bank preferred stocks are income-generating
securities that have characteristics of both
common equity and debt instruments. Like
common equity, preferred stock is junior to debt
and deposits in a bank’s capital structure. This
means that in a bankruptcy situation, creditors
of a bank, such as depositors and debt holders,
have priority over preferred holders. It is because
of this subordination, and the additional credit
risk that investors take on, that preferreds have
a higher yield, and tax-advantaged treatment for
U.S. taxpayers, compared to bonds of the same
issuing institution. Why the tax advantage? Their
distributions are considered dividends and not
interest, and so they are taxed at the capital gains
rate, and not the income tax rate.
Preferreds share characteristics with taxable fixed income
instruments, such as investment-grade and high yield bonds,
in that they have both credit and interest rate risk. Preferreds
have credit risk in that they depend on the issuing institution
to make payments. As with bonds, the prices of preferreds
have an inverse relationship with changes in interest rates.
When interest rates fall, the value of bank preferreds generally
goes up, and when interest rates rise, the value of preferreds
generally falls. We continue to monitor not only interest rate
movements, but also the effect those movements might have
on the flows and risks of the preferreds sector.
Preferreds can either be issued as $25 par or $1,000 par
securities. Even though most preferreds are perpetual
instruments, they vary in their interest-rate sensitivity
depending on the structure. For example, fixed-to-float
securities typically have less duration than fixed-for-life, all else
being equal. Similarly, many preferreds are callable, and those
with a shorter call date typically carry less outright duration
risk than longer-call securities.
As you can see in the graph (on page 10), the value of the S&P
Preferred Stock Index (SPPREF)3 fell sharply during the 2013
“taper tantrum” when 10-year interest rates rose to almost
3.00% from 1.63% in a span of five months. During that
period, the value of this index fell almost 10%. We have had a
similar, though more muted, reaction since October 1, 2016,
as rates rose to 2.30% from 1.65%, and the preferred index
fell about 5.00%.
3
The S&P Preferred Stock Index is designed to measure the performance of non-U.S. traded, developed market preferred stocks.
10 | PREPARING FOR RISING U.S. RATES
S&P Preferred Stock Index has fallen in value during periods of rising interest rates
5%
860
840
4%
820
800
3%
780
760
2%
740
1%
0%
11/2011
720
10Yr Treasury Yield (LHS)
S&P Preferred Stock Index (RHS)
11/2012
11/2013
700
11/2014
11/2015
680
11/2016
Source: Bloomberg. Data as of November 29, 2016.
If the quality of a bank’s underlying credit is improving at the
same time interest rates are rising—a situation analogous to
today—any losses due to interest rates could potentially be
mitigated by improved credit spreads. Still, if interest rates rise
too much or too quickly, the rates loss may be much higher
than any gain from credit spread compression.
What this means for bank preferred
stock holders
• Given improving credit fundamentals over the past few
years for most U.S. banks, as well as a low interest rate
environment, we believe preferred stock has presented
an opportunity for clients to gain higher tax-advantaged
income.
• With a market that has begun to price in potentially
higher rates under the new presidential administration,
we are more concerned with the effects of rising rates
on bank preferreds. We believe it is prudent for clients to
ensure that their portfolios are appropriately sized, and
that they hold some mix of floating-rate and fixed-tofloat structures to mitigate interest rate risk.
• We advocate that clients consider a more actively
engaged approach to investing in preferreds to be able
to respond to a changing interest rate environment.
| 11
Rising interest rates could impact your
variable rate product
In addition to reviewing the impact of rising rates
It is no surprise that many clients have taken advantage
of record low interest rates over the last eight years by
implementing floating-rate borrowing strategies to access lowcost capital. With the recent increases in rates and the belief
that short-term and long-term U.S. interest rates will continue
to rise, we encourage you to review your financial goals and
evaluate, if a variable rate line of credit is appropriate.
on your investment portfolio, it’s equally important
to reassess your borrowing strategy to ensure your
liabilities are appropriately structured.
LIBOR and U.S. Treasury yield curve
2.36%
2.50%
2.18%
11/25/2015
11/25/2016
1.83%
Interest Rate
2.00%
1.41%
1.50%
2.23%
2.01%
1.66%
1.12%
0.94%
1.00%
0.61%
1.25%
0.93%
0.50%
0.00%
0.23%
1m LIBOR
0.41%
3m LIBOR
2 yr
3 yr
5 yr
7 yr
10 yr
Tenor
Sources: Bloomberg, Department of Treasury. Data as of November 25, 2016.
Lines of credit are extended at the discretion of J.P. Morgan, and J.P. Morgan has no commitment to extend a line of credit or make loans
available under the line of credit. Any extension of credit is subject to credit approval by the lender in accordance with the terms contained in
definitive loan documents.
12 | PREPARING FOR RISING U.S. RATES
Key considerations
Before making any changes, it’s important to consider the
following:
•What is your view on interest rates? Do you expect rates to
rise, and if so, to what degree?
•What is the purpose, amount, source of repayment and
expected tenor of your current or expected future debt?
•Do you expect to sell assets/receive additional sources of
income in the near term?
•What is your tolerance for interest rate risk? How much
financial flexibility do you have if your cost of debt were to
increase more than expected?
What this means for clients who have a U.S.
dollar-denominated floating rate line of credit •There are a number of borrowing strategies to consider,
within the context of your personal situation and
particular objectives, in any rate environment.
•Be mindful that rising rates may impact the cost of your
floating-rate loan.
•Review your outstanding loans and current financial
condition to determine the best options. Certain
borrowing strategies may not be suitable for all
investors.
| 13
In summary
With the anticipated growth for the U.S. economy, the
pro-growth agenda of the new U.S. administration and
expectations for policy changes by the Federal Reserve in
2017, we believe that U.S. interest rates will gradually rise. As
markets respond to a changing economic cycle, new risks and
opportunities may emerge for you as an investor in both stock
and bond markets.
If you have exposure to U.S. fixed income instruments, you
should remember that all bonds, even investment-grade
bonds, are subject to changing interest rate risks and can
be negatively impacted by rising rates. Diversifying fixed
income allocations and staying informed are key in a changing
interest rate environment. Whether you already own bonds—
individually or through managed strategies—or are planning
to purchase them, it is important to understand the principles
that underlie fixed income investing. As with any investment,
it is important to know what you own.
Take the next step
Today’s ever-changing markets require investors to be
informed. Whether you invest independently, or with
an Advisor, we encourage you to better understand
the changing climate and ensure that your investment
portfolio is aligned with your long-term goals.
14 | PREPARING FOR RISING U.S. RATES
AUTHORS
Solita Marcelli
Managing Director and Global Head of
Fixed Income, Currencies and Commodities
for J.P. Morgan Private Bank
Philip Guarco
Managing Director and Global Head of
Fixed Income Strategy
for J.P. Morgan Private Bank
Irena Alagic
Executive Director, Global Fixed Income
Strategist
for J.P. Morgan Private Bank
This material is intended for your personal use and should not be circulated to any other person without our
permission, and any use, distribution or duplication by anyone other than the recipient is prohibited.
Past performance is never a guarantee of future results.
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products and services offered by J.P. Morgan’s private banking business, part of JPMorgan Chase & Co. The views and
strategies described in the material may not be suitable for all investors and are subject to investment risks. Please
read this Important Information in its entirety.
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