Interest Rates Unlikely To Fall Soon: Bond Guru Projects 10-Year Yields Spiking To 5.5% In 2024
Portfolio Pulse from Piero Cingari
Jim Bianco, a top Wall Street analyst, predicts the 10-year Treasury yield will rise to 5.5% by mid-2024, the highest since May 2001. He believes the Fed will adopt a more hawkish approach and sees the economy expanding despite higher interest rates. Bianco suggests the Fed may cut rates up to three times, contrary to market expectations of up to six cuts. He also notes the yield curve has been inverted for 15 months, and normalization could benefit banks. The US Treasury 10 Year Note ETF (UTEN) has rallied 8% since 2023's lows.
January 04, 2024 | 11:09 pm
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NEUTRAL IMPACT
Jim Bianco's prediction of rising 10-year Treasury yields to 5.5% by mid-2024 and a more hawkish Fed could lead to a normalization of the yield curve, potentially benefiting the US Treasury 10 Year Note ETF (UTEN). The ETF has already seen an 8% rally since 2023's lows.
While rising yields typically decrease the price of existing bonds, the normalization of the yield curve could be beneficial for the financial sector, including instruments like UTEN. However, the exact impact on UTEN will depend on the pace and magnitude of rate changes and yield curve adjustments.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80