It will likely take economic stagnation to get back to the low rates of 2020-2021 – Rabobank
|US treasury yields have risen substantially in recent weeks. The question is how far yields could rise in the coming years. Another is how far they could fall. Economists at Rabobank address these questions.
Still upward potential in the 10-year US treasury yield in the FOMC scenario
We find that if the economy evolves in line with the FOMC projections, the 10-year yield will rise to over 5% in 2024, followed by a gradual decline to the 3-4% range in the coming years.
In a scenario with inflation rebounding to 5%, the 10-year yield peaks at almost 6.1% in December 2024 and then slides back slowly to about 4.5%.
In a scenario of economic stagnation, the 10-year yield starts to fall in 2024 and continues to decline toward 1% in the following years.
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