The yield on 10-year US Treasuries reached approximately 4.70% on August 19, its highest level in 19 months, with 57% of Bloomberg survey participants anticipating it will breach the 5% threshold before the end of 2026, a level not sustainably exceeded since 2007. Mortgage rates have already climbed above 7%, dampening residential real estate transactions. Persistent inflation, massive federal deficits, and the Federal Reserve’s balance sheet reduction are driving yields higher. Additionally, 82% of Reuters-surveyed strategists identified upside risks to their own forecasts, suggesting the upward trajectory for rates may continue.
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