Wall Street is falling further and further behind in assessing the direction of the $14.1 trillion Treasuries market.
In March, the consensus was that 10-year yields would be well on their way to 3% by now. Inflation and economic growth would take hold, and the Federal Reserve would potentially tighten three times in 2017 — perhaps even four. Or so the argument went.
Fast forward to the present, and the 10-year yield is barely above 2%, a key psychological level, which means going back to the drawing board yet again. Forecasters now see 10-year yields rising to 2.48% at year-end, according to the latest Bloomberg poll. The projection for the end of this year is the lowest since November, just like yields themselves. As for clearing 3%? Wait until 2019.
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