Reuters Survey: Long-Term U.S. Treasury Yields Are Expected to Remain High Due to Inflation and Debt Pressure Diminishing Interest Rate Cut Expectations

ChainThink news, October 15, a Reuters survey of 75 bond strategists showed that short-term US Treasury yields are expected to decline due to expectations of Federal Reserve rate cuts, while long-term bond yields are likely to remain resilient, considering persistent inflation, expanding deficits, and concerns about the independence of the Federal Reserve. The median forecast of this survey indicated that the benchmark US 10-year Treasury yield is currently around 4.0%, fluctuating around 4.10% in three and six months, and expected to rise to 4.17% after one year. Sustained increases in long-term yields could further deteriorate the fiscal condition of the Washington authorities.

Many analysts stated that with economic growth still strong and inflation far above the Fed's 2% target, the policy is not highly restrictive enough to justify the expectation of five rate cuts reflected in the current interest rate futures market from now until 2026. They warned that prematurely easing policy too much could reignite inflationary pressures and push yields sharply higher at a time when the labor market begins to weaken. (Jinshi)