Is the bottoming moment here? JPMorgan Asset Management is buying U.S. and U.K. bonds against the trend!

Ask AI · How the Iran War is disrupting market interest-rate expectations?

A fund manager at JPMorgan Asset Management has made a bold statement: market panic has “mispriced” short-term bonds, and this is a great time to step in and pick up bargains!

JPMorgan Asset Management is buying government bonds, including those in the U.S. and the U.K., betting that inflation concerns have pushed parts of the market into oversold conditions.

A fund manager based in Hong Kong, Arjun Vij, found that after the Iran war broke out, the market massively priced in expectations for higher interest rates—turning short-term bonds into the worst-hit area, but investment value is being incubated right here. The fund currently favors parts of the yield curve in the 2- to 5-year maturity range, and has found opportunities to enter the market in the U.S., Australia, and U.K.

“ We believe some investment value has already emerged—this is exactly where we should add exposure first,” Vij said. He helps manage the company’s global bond fund, and a fact sheet shows that as of February this year, over the past three years, the fund’s yield has exceeded 14%.

Last week, a surge in oil prices prompted traders to begin incorporating expectations for Federal Reserve rate hikes into pricing, driving the yield on two-year U.S. Treasuries up to its highest level since June last year. This is an 180-degree turnaround compared with conditions before the war, when the market was still eagerly hoping the Fed would cut rates twice by 25 basis points each before the end of the year.

Comments made by U.S. President Trump on Thursday suggested that the U.S. may take a more aggressive approach toward Iran. As investors prepare for the possibility of further disruptions to global oil supply, the outlook for the bond market has become even more uncertain. A Bloomberg gauge measuring global bond returns fell 3.1% in March, the biggest single-month decline since October 2024.

For investors like Vij, this kind of market misalignment is actually opening up some windows to buy , even though they remain cautious. He believes staying flexible—keeping sufficient liquidity and room for risk tolerance—is the best strategy right now.

“ The risk of further repricing of short-end rates hasn’t been fully eliminated,” he admitted. However, “when you see expectations shift from the U.S. and the U.K. roughly each cutting rates twice to the U.K. hiking three times and U.S. rates staying unchanged, then you know it’s time to start stepping in and sweeping up.”

After Trump made the comments, during Thursday’s Asia trading session, the yield on two-year U.S. Treasuries rose by as much as 6 basis points. Meanwhile, the yield on three-year Australian government bonds surged by up to 15 basis points.

Even so, Vij doesn’t agree with going all-in. “Would you choose to fire all your bullets today? Probably not,” he said. But “to put it another way: if you plan to invest $100 here, you’d want to have spent at least $50 during this selling wave—while still keeping some buffer so you can continue adding later.”