Wall Street divided on US Treasury yields
Rising US Treasury yields have divided Wall Street’s leading banks over their year-end forecasts.
The 10-year Treasury yield climbed to 5.36%, while the 30-year yield surpassed 5.7%, reaching their highest levels since 2002. Higher energy prices driven by Middle East conflicts, the Fed’s restrictive monetary policy and economic growth supported by artificial intelligence investments have increased uncertainty over the outlook for bond yields. Bank of America expects the Fed to raise interest rates in October and December, while Barclays warned that the 30-year Treasury yield could reach 6% if economic strength persists.
Year-end forecasts among major investment banks vary significantly. Goldman Sachs expects the 10-year Treasury yield to decline to 4.75%, while Deutsche Bank and Morgan Stanley forecast 4.8%. Bank of America and Citigroup project 5%, JPMorgan expects 5.05%, and Barclays forecasts 5.25%. Some institutions anticipate lower yields as inflationary pressures ease, while others warn that strong economic activity, elevated government debt and additional Fed rate hikes could sustain selling pressure in the bond market.
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