A Reuters survey conducted from Oct. 5 to Oct. 7 found that fixed-income strategists still expect U.S. Treasury yields to decline in the coming months, even after the benchmark 10-year Treasury yield posted its biggest quarterly rise since 1994. The poll, which covered nearly 60 strategists, showed a median forecast for the 10-year yield to fall to 5.00% by year-end, 4.90% in six months, and 4.75% in one year. Even so, confidence in that call has weakened after strategists misjudged the direction of yields for nine straight months. Some respondents said financial markets may have priced in too many Federal Reserve rate hikes, with the eventual tightening path likely to come in below market expectations. Reuters also noted that inflation concerns tied to the U.S.-Israel war with Iran, higher policy rates across major central banks, heavy borrowing by technology giants for AI infrastructure, and increased U.S. Treasury issuance have all added pressure on yields and pushed government borrowing costs in several advanced economies to multi-decade highs.
Fixed-income strategists still expect U.S. Treasury yields to move lower over the coming months, according to a Reuters survey conducted from Oct. 5 to Oct. 7.
That view has held even after the benchmark 10-year U.S. Treasury yield logged its biggest quarterly increase since 1994. Still, confidence in a decline has faded after nine consecutive months of calls that failed to match the actual direction of yields.
Some strategists said financial markets may have gone too far in pricing a string of Federal Reserve rate hikes, with the eventual scale of tightening likely to come in below current market expectations.
At the same time, inflation concerns linked to the U.S.-Israel war with Iran, along with higher policy rates at major central banks globally, have pushed government borrowing costs in several advanced economies to levels not seen in decades. Heavy debt issuance by technology giants to fund artificial intelligence infrastructure, as well as increased U.S. Treasury supply, has also kept pressure on yields.
Reuters surveyed nearly 60 strategists. The median forecast showed the 10-year Treasury yield at 5.00% by the end of this year, 4.90% in six months, and 4.75% in one year.
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