TD Securities lowers Treasury yield forecasts
This was supposed to be the year when Treasury yields finally turned the corner, when the everlasting bear market in bonds was finally slayed.
10-year Treasury yields started the year at 2.45% and rose up to 2.62% in March. The bears looked like they were on their way to victory but a double top formed and yields have fallen ever since, hitting 2.10% in June and trading at 2.18% this week.
TD Securities had forecast yields would be at 2.80% at year-end but has now trimmed that to 2.50%. For the end of 2018, they now see 2.75% compared to 3.30%.
They now see less of a chance of fiscal stimulus and lower inflation. Overall, they still think yields will rise more than the market expects because the Fed will hike further.
