JPMorgan predicts sharp decline in global bond supply

Wall Street bank JPMorgan, which stated that the worst is over for global bonds, predicted that a supply-demand gap of around $1 trillion will push bond yields down next year. In a note published by JPMorgan, it was stated that a sharper decline is expected in global bond supply compared to demand. According to expectations, global bond supply will decrease by $1.6 trillion next year. In return, strategists expect a $700 million decrease in demand. The Bloomberg Global Bond Index is set to fall 16 percent this year, marking its first two consecutive years of losses since at least 1990. In November, bonds showed signs of life with signals of yield search and slower Fed rate hikes, and the global bond index rose by 5 percent. JPMorgan strategists stated that after an unexpected year, they expect an improvement in the bond supply-demand balance in 2023, and that the decline in inflation will contribute to the decline in bond yields.