Societe Generale: The Federal Reserve will continue to cut interest rates, leading to a decrease in short-term interest rates. Tariffs and fiscal deficits are pushing up long-term interest rates
ChainCatcher News, BNP Paribas predicts that by the end of 2025, the yield on 10-year US Treasury bonds will rise to 4.5%, while the yield on 2-year US Treasury bonds will drop to 3.5%.
The reason is that the Federal Reserve will continue to cut interest rates which will lower short-term rates, but it will also stimulate economic growth and increase fiscal deficits, prompting an increase in demand for long-term government bonds and leading to a rise in long-term yields.
In addition, Trump's tariff plan may push up inflation expectations. Coupled with the U.S. government's plans to deal with fiscal deficits by increasing issuance of national debt, both factors are expected to push up yields.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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