TechFlow, Oct 15 — According to Jinshi Data, a Reuters survey of 75 bond strategists shows that short-term U.S. Treasury yields are expected to decline due to anticipated Federal Reserve rate cuts, while long-term yields are likely to hold up, reflecting persistent inflation, ballooning deficits, and concerns over the Fed's independence. The median forecast from the survey indicates that the benchmark U.S. 10-year Treasury yield, currently around 4.0%, will fluctuate near 4.10% in three and six months, and is expected to rise to 4.17% in one year. Persistently rising long-term yields could further worsen Washington's rapidly deteriorating fiscal situation.
Many analysts say that with economic growth still strong and inflation well above the Fed's 2% target, monetary policy isn't restrictive enough to justify market expectations—priced into rate futures—for five rate cuts between now and 2026. They warn that easing policy too quickly and too much, especially as the labor market begins to weaken, could reignite inflationary pressures and send yields soaring.
