TechFlow News, February 12: According to data from JINSHI Data, a Reuters survey indicates that long-end U.S. Treasury yields will remain stable in the near term but are expected to rise later this year amid concerns over inflation and the Federal Reserve’s independence. Short-end yields, meanwhile, are projected to decline modestly amid expectations of rate cuts. Concurrently, nearly 60% of bond strategists (21 out of 37) believe that the massive Treasury issuance required over the coming years to finance Trump’s tax cuts and spending plans will render it infeasible for the Fed to significantly shrink its $6.6 trillion balance sheet. Another Reuters survey forecasts that the Federal Reserve will implement two rate cuts later this year, with the first occurring in June—when Waller assumes the Fed chairmanship. The interest-rate-sensitive 2-year Treasury yield is expected to fall from its current level of 3.50% to 3.45% by the end of April and further to 3.38% by the end of July. The survey’s median projection also shows that the benchmark 10-year Treasury yield is expected to rise to 4.29% one year from now, up from last month’s forecast of 4.20%.
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