Reuters Poll: Long-Term U.S. Bond Yields Expected to Remain Elevated as Inflation and Debt Pressure Ease Rate Cut Bets

BlockBeats News, October 15th, a Reuters survey of 75 bond strategists showed that due to expectations of a Fed rate cut, short-term U.S. Treasury yields will decline, while long-term bond yields are expected to resist falling, considering stubborn inflation, an expanding deficit, and concerns about Fed independence. The median estimate from the survey shows that the benchmark U.S. 10-year Treasury yield is currently around 4.0%, fluctuating around 4.10% in three and six months, and is expected to rise to 4.17% in a year. A continued increase in long-term yields may further worsen Washington's rapidly deteriorating fiscal situation.

Many analysts believe that with the economy still strong and inflation well above the Fed's 2% target, policy is far from restrictive enough to justify the expectation in the current rate futures market of five rate cuts from now until 2026. They warn that as the labor market begins to soften, prematurely and excessively easing policy could reignite inflationary pressures, driving yields higher. (KinnyTen)