JPMorgan Asset Management: US Treasuries have fallen to their "most painful point," it's time to buy long-term Treasury bonds at the bottom.

Bob Michele, chief investment officer at JPMorgan Asset Management, said his team has begun buying long-term U.S., Japanese, and Australian government bonds, believing current prices are "too cheap" and the bond market has reached a "painful" tipping point.

In a Bloomberg TV interview on Wednesday, Michele said that multiple positive factors are converging: starting with the European Central Bank's interest rate hike last week, through the Federal Reserve, and culminating in the Bank of Japan's policy action this Friday, a series of central bank actions will provide significant support for the bond market.

Meanwhile, with the midterm elections approaching, the situation in the Middle East is expected to stabilize, and geopolitical risks may gradually cool down.

U.S. Treasury Secretary Scott Bessant launched a buyback program for long-term Treasury bonds last month, which Michele sees as a key force for stabilizing the market, noting that Bessant "still has ample ammunition to add to it if he so desires."

Excessive selling in the long term signals a potential peak in yields.

U.S. Treasury bonds have recently experienced a massive sell-off, with 10-year and 30-year yields climbing to multi-year highs ahead of the Federal Reserve's rate hike announcement on Wednesday. This rate hike marks the Fed's first action since 2023.

Michele believes the sell-off at the long end of the yield curve has been severely overshooted. He points out that the rapid surge in long-term yields "highlights market concerns about the Fed's current sense of loss of control," and that this rate hike helps Fed policymakers "reaffirm their control over the situation."

In his view, "the dominoes have begun to fall," and the policy linkages from the European Central Bank to the Federal Reserve and then to the Bank of Japan will form a complete logical chain supporting the bond market.

Bessen's buyback program serves as a stabilizing anchor.

The long-term government bond buyback program launched by Finance Minister Bessant last month is seen by Michele as an indispensable stabilizing force in the current market volatility.

Michele emphasized that Bessant "has ample ammunition and can increase it further if it wishes," implying that there is still room in the policy toolbox.

The existence of the repurchase program provides technical support for long-term government bonds on the supply and demand side, helping to alleviate previous selling pressure. Given the increasingly clear policy path of the central bank, Michele believes that the current investment value of long-term bonds has become significantly apparent.

Unlike many on the sidelines, Michele says his team has taken action, starting to buy long-term U.S., Japanese, and Australian government bonds. In his view, current prices are "too cheap," and the market has reached a point of "extreme pain."

This statement usually signifies a concentrated release of pessimistic emotions and a potential turning point.

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