- Despite Donald Trump cutting deals with Mexico and Canada, we are not backtracking from our revised view that the Fed will stay on the sidelines for the next six months. What’s more, if US tariffs end up close to our assumptions, we think the boost to inflation will prevent cuts later in 2025. This has led us to revise up our forecast for the 10-year Treasury yield, from 4.50% to 4.75%. It has also bolstered our belief in a stronger dollar and renewed US exceptionalism in equities.
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