Although upward pressure on the 10-year Treasury yield has abated a bit, the big picture is that it has risen by ~80bp on net in the past four months. While some of this rise has reflected a reassessment in the market of how quickly the Fed will cut rates next year, this isn’t the whole story. Investors have also ratcheted up their projections for where the rate will settle further out in time. For our part, we still expect the 10-year Treasury yield to drop back significantly by the end of next year, as the Fed eases by more than investors are discounting – even though we tend to agree that the rate will settle at a higher level than we had once envisaged.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services