The US benchmark bond yield will trade at 4% or higher through at least the end of 2024 as the Federal Reserve averts an economic contraction in its fight against inflation, according to Goldman Sachs Group Inc.
“Our yield forecasts are based on that we see no recession and that we think inflation is still going to be above the Fed’s target,” Praveen Korapaty, chief rates strategist at Goldman Sachs, said by phone. It doesn’t seem likely “that in a non-recession scenario, with inflation above the Fed’s target, that the Fed would be easing” as the market are now pricing.
Ten-year Treasury yields -- which are currently around 3.75% -- has traded at 4% or higher for 23 days so far in 2022--- all occurring since late September. Before that brief stint -- which came as traders ramped up Fed hike wagers -- the yield hadn’t touched that level since early 2010.