Bond markets react to tariff-on/tariff-off announcements

While recent meetings of the Federal Reserve and European Central Bank offered few surprises, President Trump’s tariff-on/tariff-off announcements had a meaningful impact on markets. We explore the bond markets’ reactions and opportunities created for fixed income investors.

What does this mean for fixed income investors?

The European bond market is looking more appealing in the current environment. If tariffs were to be implemented, this could lead to stagflation in the US—weaker economic growth and higher inflation—contingent on any retaliatory measures. In contrast, Europe might experience a negative growth shock, but without the same inflationary pressures as in the US. This scenario would favour European bonds, as bond yields would likely decline further.

About the Bond Bulletin

Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.

Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.

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