Fed’s Rate Cuts Push Long-Term Yields Up & Short-Term Yields Down

BlockBeats reported on November 30 that Societe Generale forecasted that by the end of 2025, the 10-year U.S. bond yield will increase to 4.5%, while the 2-year U.S. bond yield will decrease to 3.5%. This prediction is based on the expectation that the Federal Reserve will continue to lower interest rates, thus reducing short-term rates.

However, these measures will also increase demand for long-term Treasury bonds as they stimulate the economy and raise fiscal deficits, which will elevate long-term yields. Furthermore, Trump’s tariff plan might raise inflation expectations, and the U.S. government is anticipated to issue more government bonds to address the fiscal deficit, further driving up yields.

(Golden Ten)

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