Fed remains sensitive to downside risks to employment, says JPMorgan's Kelsey Berro

Group 1 - The market reaction to the Fed's commentary was influenced by prior positioning, with expectations for a more hawkish stance than what was delivered [2][3] - The Federal Reserve aims to achieve a neutral policy rate, with estimates ranging from 2.75% to 3.75%, indicating uncertainty in the exact target [3][4] - The Fed remains data-dependent, with upcoming payroll and CPI reports expected to impact their decision-making [5][6] Group 2 - Since the Fed began cutting rates over a year ago, the 10-year Treasury yield has increased, highlighting a dislocation in market expectations [8][10] - Treasury yields have generally been lower year-to-date, with the U.S. performing well among developed markets [9] - The persistence of high real yields, despite rate cuts, suggests market confidence in structural growth and productivity improvements [11][12]