J.P. Morgan suggests selling 2-year U.S. Treasuries, expecting the Federal Reserve to have difficulty significantly lowering interest rates.

J.P. Morgan strategists suggest selling 2-year U.S. Treasuries as a "tactical" trade, citing the robust economic growth outlook that will make it difficult for the Federal Reserve to significantly lower interest rates. "The solid economic foundation means that even if Kevin Warsh is confirmed and takes over as Fed chair, influencing the decisions of the Federal Open Market Committee will be challenging," wrote the team of strategists led by Jay Barry in a report. Traders currently expect the Fed to cut rates by 25 basis points in July, with another cut before the end of the year. Prior to the stronger-than-expected employment data released earlier this week, the market was almost certain the Fed would cut rates in June.