fxstreet.com 12 Feb, 2021 13:45 am

10-year Treasury yield to rise a bit further driven by higher inflation compensation – CE

10-year Treasury yield to rise a bit further driven by higher inflation compensation – CE
The 10-year US Treasury yield has risen by ~25bp so far this year. With a large fiscal stimulus package looking increasingly probable in the US, and t

With a large fiscal stimulus package looking increasingly probable in the US, and the Fed unlikely to push back on higher inflation expectations, economists at Capital Economics think the yield of 10-year US Treasuries may rise a little further.All of this increases the prospects of a more rapid recovery, and higher inflation, this year.” “We doubt the Fed would push back on somewhat higher inflation compensation, either.” “We expect the 10-year US Treasury yield to rise a bit further over the next two years, driven by higher inflation compensation.

The 10-year US Treasury yield has risen by ~25bp so far this year.We have revised our end-2021 and end-2022 forecasts for the Treasury yield to 1.

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