- Advertisement -
AppsEntertainment10-year Treasury yields will break out of slump within...

10-year Treasury yields will break out of slump within weeks, Wells Fargo predicts

-

- Advertisment -spot_img


The 10-year Treasury Note yield may be on the verge of breaking out of its slump.

After stabilizing over the past several weeks, Wells Fargo Securities’ Michael Schumacher predicts the current risk backdrop will re-energize yields in the coming weeks.

He lists the Federal Reserve’s high level of comfortableness surrounding rising inflation, the massive amount of fiscal and monetary stimulus in the pipeline and the economic data’s strength.

“It’s a recipe for yields to go up and perhaps pretty significantly,” the firm’s head of macro strategy told CNBC’s “Trading Nation” on Friday.

The 10-year yield is hovering around 1.50%, falling almost 5% over the past month. But it’s up 70% so far this year and 155% over the last 52-weeks. Schumacher expects the 10-year yield to end the year between 2.10% and 2.40%.

“It sounds aggressive,” he said. “But when you think about the move that happened in February and March, it’s really not that extreme a move.”

Schumacher warns the opposite is true for inflation.

“We’ve got inflation rising pretty significantly for the next few months,” he added. “When you think back to a year ago, economies were in lockdown. Inflation actually came down quite a bit.”

‘Going to pose a difficult problem’

And, that could become a wake-up call for investors and government officials as soon as May. Schumacher notes that’s the last base effect month, a term used by economists to describe an abrupt increase or decrease in data.

“That’s going to pose a difficult problem frankly for the Fed and further policymakers,” Schumacher said. “They’ll have to figure out, hey, is this actually a real increase in inflation? Is it going to be sustained or is going to be short-lived?”

Disclaimer


LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

As vaccinations drop, outreach workers hit the streets to change minds

DETROIT — Tanika Knighton knows how devastating Covid-19 can be: Her 62-year-old father died of the disease last...

Payment tech company Marqeta files for IPO as value tops $16 billion on private markets

Marqeta Headquarters in Oakland, Calif.Yalonda M. James | San Francisco Chronicle | Hearst Newspapers via Getty ImagesMarqeta has...

After CDC change, Walmart says employees, customers can ditch masks

Masks will no longer be required for fully vaccinated Walmart employees or customers starting Tuesday, the retailer said...

Earnings reports and the Fed will test the market rally in the week ahead

Investors will see whether stocks carry their newfound momentum into the week ahead, as major retailers, including Walmart...
- Advertisement -spot_imgspot_img

Deadly violence intensifies in Gaza Strip and Israel as Biden urges de-escalation

President Joe Biden pauses while speaking in the East Room of the White House in Washington, D.C., U.S.,...

MIT grad, suspected of killing Yale student, arrested in Alabama

U.S. marshals in Alabama on Friday captured an MIT graduate accused of gunning down a Yale University graduate...

Must read

- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you