The firm expects 10-year Treasury yields to eventually settle at 2%
After the recent volatility in the bond market, the firm’s chief investment officer, Bob Michele, says that the “proper place” for 10-year Treasury yields is around 2%. Adding that:
“We’re first likely to see some consolidation in the 1.5-1.75% range as quarter-end brings rebalancing in multi-asset class accounts, flows from pension funds and insurance companies taking advantage of the higher yields and flows from Japan.”
Thereafter, 10-year yields should move towards 2% and take real yields to about zero as based on the Fed’s inflation target.
This adds to other forecasts for higher yields from other institutions: