HSBC has raised its year-end target for the U.S. 10-year Treasury yield to 4.65% from 4.30%, while saying the benchmark is more likely to end the year near that level than at 6%, a figure cited in some market views. The bank also increased its target for the two-year Treasury yield to 4.20% from 3.85%.
According to the update, HSBC sees the Federal Reserve’s internal debate over another rate hike as finely balanced, with the odds of an additional increase close to 50-50. Even so, the bank still expects the Fed to keep rates in place through 2027. It added that persistent fiscal deficits are likely to keep pressure on the long end of the yield curve.
HSBC also pointed to this week’s purchasing managers’ index readings, jobless claims data, and remarks from multiple Fed officials as the next tests for market expectations around the direction of yields. The item was cited by BeInCrypto.
HSBC has updated its U.S. Treasury outlook, raising its year-end target for the 10-year yield to 4.65% from 4.30% and saying the benchmark is more likely to finish near that level than at 6%, which reflects some views in the market.
The bank also lifted its target for the two-year Treasury yield to 4.20% from 3.85%.
HSBC said the Federal Reserve’s internal debate over whether to raise rates again is in a 「delicate balance」, with the probability of another hike in this cycle close to 50-50. The bank still expects the Fed to hold rates through 2027, while adding that persistent fiscal deficits will put pressure on the far end of the yield curve.
HSBC also said this week’s purchasing managers’ index data, jobless claims figures, and comments from several Fed officials will test market expectations for the path of yields.
The update was cited by BeInCrypto.
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