Bloomberg
Published Dec 09, 2019 10:10AM ET
Updated Dec 09, 2019 12:08PM ET
Wall Street Doubts the Prospects for U.S. Yields Above 2% in 2020
(Bloomberg) -- The biggest dealers of U.S. government securities have been dropping their forecasts for Treasury yields over the next year, and for the most part, their targets for where the 10-year benchmark will go are landing below 2%.
Societe Generale (PA:SOGN), the most bullish so far, sees the 10-year note’s yield falling to 1.20% from from its current level of around 1.82%, while BMO Capital Markets, HSBC Holdings Plc (LON:HSBA) and TD Securities also project declines. Among major banks that have released 2020 outlooks, Goldman Sachs Group Inc (NYSE:GS). has the highest yield prediction, but even that is for the benchmark to rise only to 2.25%, while JPMorgan Chase (NYSE:JPM) & Co. is the next most bearish with a call of 2.05%.
Expectations for growth, inflation and monetary policy largely explain the differences between the forecasters. Goldman Sachs predicts no action by the Federal Reserve, while SocGen is looking for a full percentage point of central-bank easing. But calls also take into account the U.S.-China trade war, Brexit and the U.S. presidential election.
The 10-year yield has been below 2% since Aug. 1, when escalation of U.S.-China trade hostilities sparked a surge in volatility across financial markets and a temporary sell-off in U.S. stocks.
Following are forecasts provided by strategists from eight of the 24 primary dealers and some of their views:
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.