Priya Misra, bond portfolio manager at JPMorgan Asset Management, commented on CNBC’s Squawk Box program’s US economy, interest rate outlook and bond markets.
Misra said current interest rates are still restrictive, saying, “I think the Fed will continue to gradually reduce interest rates. There are different opinions about where the neutral rate level is, but market data will guide the Fed.”
Misra highlighted the strength of a company’s balance sheet and structurally sound environment, but noted that tariffs and high interest rates put cyclical pressure on growth. Therefore, he argued that investors need to create a diverse portfolio. “Fixed income assets provide both speed and protection for the economy.”
Mithra also shared his expectations for the bond market, saying that medium-term and long-term high-quality corporate bonds look attractive, but caution has been paid to low-grade high-yield bonds. Misra added that the US economy is still relatively strong on a global scale and “we need to hedge the US rather than sell it.”
Misra added that uncertainty over the labour market will persist, tariffs and possible government shutdowns could put pressure on jobs, and the Fed is cautious about the downside risks to employment.
*This is not investment advice.
