JPMorgan Chase Under Pressure as Long-Dated Treasury Yields Climb

JPMorgan Chase is facing a new test as long-dated Treasury yields climb sharply. The move has reset the tone for large American lenders, including JPMorgan Chase, which operates a deposit, card, commercial, and markets franchise that touches almost every corner of the rate curve.

The bank's balance sheet is affected by the steepening of the yield curve, with deposits gathered at short maturities and lent out at longer ones. This can result in a widening of the spread between funding costs and asset yields for JPMorgan Chase.

The bank has historically been an awkward stretch for equities, but the current mix of firmer energy costs and rising long-term borrowing rates is particularly challenging. The move in Treasury yields has been attributed to a combination of factors, including firmer energy prices, heavy government issuance, and shifting expectations about official interest rates.