Kathy Jones Predicts Steeper Yield Curve on Tariff-Driven Inflation Risks

Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, anticipates a significant steepening of the US Treasury yield curve in the coming months. This outlook follows President Trump’s State of the Union address, which placed a heavy emphasis on trade tariff policies. Analysts identify inflation as the primary catalyst for these expected market shifts, as tariffs are projected to increase price pressures across the economy. The anticipation of persistent inflationary pressure is likely to drive long-term yields higher relative to short-term rates. Such a shift reflects a bearish outlook for long-dated bond prices, directly impacting instruments like the US10Y and TLT. Investors are now closely monitoring how these policy signals will reshape macro positioning and fixed income strategies.