The U.S. Treasury yield is expected to decrease in the coming months as investors predict the Federal Reserve will cut interest rates later this year.
The benchmark 10-year Treasury yield is expected to decrease to 4.35% in three months and to 4.29% in six months. The majority of respondents increased their yield predictions since May because they worry about increasing federal debt and the massive bond issuance stemming from President Trump’s tax and spending package.
The government debt issuance continues to rise without any solution in Washington according to Collin Martin who works as a fixed income strategist at Schwab.
The market expects longer-dated bonds to experience volatility because of new Treasury supply even though most participants predict yields will decrease. Market participants maintain their wariness about potential inflation increases due to tariffs and trade uncertainties during the upcoming months.
