JPM US Treasury Market Daily

J P M O R G A N Global Markets Strategy 19 August 2026

US Treasury Market Daily But hey, I’m big in Japan

• Long-end yields fell 9bp and the broad curve flattened by a similar amount, Fixed Income Strategy following Treasury’s surprise announcement that it will be increasing the size Jay Barry AC of buyback operations for longer-dated nominal Treasuries, from a current ( maximum of $2bn per operation to “at least” $4bn Jason Hunter AC • The timing is highly unusual, as Treasury had announced its buyback ( operations calendar for the next three months at the August refunding just two weeks ago, and we can find nothing in market functioning that would force Harry Downie Treasury to increase long-end buybacks at this moment ( • We see a through-line here across a number of policy actions from Treasury in recent weeks, and believe Treasury is uncomfortable with the rise in long-term Amanda Berke yields, as it runs against the Secretary’s stated goal... ( • ...Absent real fiscal consolidation, we fear this could contribute to higher term J.P. Morgan Securities LLC premium and yields over time should Treasury become more opportunistic in its approach to debt management and move further away from its “regular and predictable” tenet • This raises the risk Treasury could reduce long-end auction sizes, though we do not think this would be a prudent action in the context of increasing funding gaps, nor do we think this would have a lasting impact on yields... • ...indeed, we see evidence that similar actions from other DMOs globally have all had temporary effects on the term structure and not a lasting impact, and we recommend holding onto 2s/10s steepeners • Treasury will auction $8bn reopened 30-year TIPS at 1pm, unchanged in size from the previous reopening last year. While real yields remain elevated, after the recent richening following Treasury’s buyback announcement we think tomorrow’s auction will likely require more of a concession to be digested smoothly • Treasury will also announce end-of-month supply tomorrow. We think the 2-, 5-, and 7-year rolls should open at 0.75bp, 0.875bp, and -0.125bp, respectively • The 2s/10s curve staged a sharp flattening move from the 51.3-55.74bp resistance area without any technical warning. We see the prospects for short- term support near the 43bp late-July pattern breakout and 38bp 50-day moving average. While the medium-term trend bias remains in favor of further steepening while above that support, the repeated June-Aug whipsaws leave us with low conviction Statistics for various on-the-run Treasury yields, curve spreads, and TIPS breakevens

See page 11 for analyst certification and important disclosures.

Jay Barry AC Global Markets Strategy ( August 2026 JPMORGAN

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