Dimon: 10-Year Yields Should Stay Above 4-4.5% Even at 2% Inflation
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- Jamie Dimon argues that even with 2% inflation, 10-year US Treasury yields should remain above 4.0–4.5% due to risk premiums, reinforcing a 'run-it-hot' thesis on long-term bonds
- Leo Nelissen says the S&P 500 is pricing in a 'good outcome' with little margin of safety, making selective stock picking more attractive than broad index exposure
- Nelissen highlights five specific picks — LB, TPL, VICI, UNP, and CME — for their inflation protection, strong balance sheets, and secular tailwinds
- Nelissen's 'TOLL+M' framework prioritizes tangible assets, oligopoly advantages, low incremental CapEx, durable cash flows, and macro tailwinds
- Nelissen discloses beneficial long positions in LB, TPL, UNP, and CME through stock ownership, options, or other derivatives
Why it matters: Dimon's floor of 4.0–4.5% on 10-year yields — even in a benign 2% inflation scenario — undercuts the assumption that a return to target inflation will mechanically pull long rates lower, which matters for anyone duration-sensitive. Nelissen's response is concrete: rotate from index exposure into five oligopoly-style, inflation-resistant names.
