TS Lombard warns 10Y yields could reach 8% amid Fed policies
Summary
The 10-year Treasury yield climbed to 5.30% on Wednesday, marking its highest level since 2002, prompting speculation on whether it will soon reach 6%. However, TS Lombard's chief US economist Steven Blitz warns that such predictions may be overly conservative, stating in his recent note that the yields could ultimately rise to 8% over the next few years, with 5.75% as the next immediate target. This perspective aligns with broader market discussions on the potential trajectory of yields as Wall Street grapples with this significant milestone.
Analysis
TS Lombard: TS Lombard is a financial research and advisory firm focused on macroeconomic analysis and market strategy. Its chief US economist Steven Blitz recently published a note titled 'Original Sin Redux' arguing that the current rise in Treasury yields will extend well beyond near-term levels due to longstanding Federal Reserve policy issues. Steven Blitz: Steven Blitz is the chief US economist at TS Lombard, specializing in US monetary policy and bond market trends. In a note published this morning, he contends that 10-year yields are not done rising at 6% and will instead target 5.75% next before reaching a long-run level of 8% over a few years amid ongoing volatility. Market Outlook: Wall Street discussions include views that yields could reach 6% or higher in the near term. Yield Milestone: The 10-year Treasury yield hit 5.30% on Wednesday, its highest level since 2002.
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macropolitics