JPMorgan strategists raised their forecast for the 2-year U.S. Treasury yield by 40 basis points to 4.7% and lifted their forecast for the 10-year yield by 20 basis points to 5.05%. According to Sina Finance, Jay Barry and other strategists at the bank wrote in a report that they believe U.S. Treasury yields will move higher over the year and said the current environment is similar to late 1999 to 2000, when the Federal Reserve raised rates by a cumulative 100 basis points amid strong economic growth and inflation.

The bank said the forecast changes reflect its view that it is still too early to say the current yield uptrend has ended. It expects yields to mean-revert somewhat toward its fair value model, but also expects the pace of gains to slow in the coming months.

JPMorgan said the outlook carries two-sided risks. With economic growth above trend and the labor market tight, Treasury yields could continue to climb. However, persistent shocks could slow consumer spending and lead markets to expect a slower pace of monetary tightening, while higher rates could also weigh on stocks and prevent yields from rising further from current levels, or even push them lower.