Reuters Survey: Long-term U.S. Treasury Yields Expected to Remain Elevated as Inflation and Debt Pressure Weaken Rate Cut Expectations

Jinse Finance reported that a Reuters survey of 75 bond strategists shows that, due to expectations that the Federal Reserve will cut interest rates, short-term U.S. Treasury yields are expected to decline, while long-term yields are likely to remain resilient, considering persistent inflation, ballooning deficits, and concerns about the Fed's independence. The median forecast of this survey indicates that the benchmark 10-year U.S. Treasury yield, currently around 4.0%, will fluctuate around 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, policy cannot be considered highly restrictive, and is insufficient to justify the current interest rate futures market's expectation of five rate cuts between now and 2026. They warn that easing policy too much and too soon, just as the labor market begins to weaken, could reignite inflationary pressures and drive yields sharply higher. (Golden Ten Data)