Thursday, 08 October, 2026
US Strategists on Bond Yields
{US} Mark Cabana, co-head of global rates strategy at Bank of
America Corp.
Bank of America officially forecasts the 10-year yield at
5% by the end of the year, in line with its economists’ current
predictions that the Fed will hike rates at its next two
meetings in October and December, bringing the economy to an
“equilibrium.”
However, Cabana’s team has issued a set of trade
recommendations based on the assumption that yields could keep
rising. “We don’t think you want to fade it yet. Even though our
forecasts are lower, even though we’re operating off of this US
economic base case, we judge the balance of risks as suggesting
higher rates are more likely than lower ones right now.”
Anshul Pradhan, head of US rates research at Barclays
Capital
Barclays Capital raised its forecast for the 10-year yield
to 5.25% from 5% for the third quarter of 2027 and sees little
reason for yields to come back down anytime soon. “As long as
the US economy is resilient, there is no particular catalyst in
sight for why yields should fall below 5%.”
Pradhan wrote in a note last week that the 30-year yield
could hit 6% if the US economy remains resilient. “The markets
are still discounting a long-run neutral rate of around 3.5%,
and we think that over time there is scope for productivity to
surprise to the upside. If that were to happen, then the markets
can reassess that long-run level even higher. And that in our
view is going to push 30-year yields to 6%, or at least the fair
value of 30-years to 6%.”
Michael Chang, interest-rate derivatives strategist at
Citigroup Global Markets
“We do feel pretty good about our 5% year-end forecast” for
the 10-year note. The 30-year yield hitting 5.3% by the end of
2026 is “definitely very doable.”
“Right now we’re in a mini-buyer strike, so that makes it
very hard for rates to trade near where it’s supposed to. The
deviation can be extreme and it can stay there for longer than
normal. So we do think it’ll take time. But over the medium term
we should trade closer to fair value, which we think is going to
be lower from here. Our forecast reflects that bullish bias.”
Matthew Raskin, US head of rates research at Deutsche Bank
AG
Deutsche Bank is sticking with its prediction that the 10-
year yield will fall to 4.8% by year-end but says the current
“level of volatility warrants more of a scenario-based approach
to things.”
Raskin says that based on market fundamentals, there’s a
chance the 10-year could continue to rise and “plausibly settle
in a range of 5% to 5.5% and even above that. I don’t think you
have to make a lot of outlandish or stretched assumptions around
that stuff to get to yields at or above where we sit today.”
William Marshall, head of US rates strategy at Goldman
Sachs
Goldman Sachs expects the 10-year note to fall to 4.75% by
year-end, a decline of nearly 60 basis points from Wednesday’s
peak. “I think it’s reasonable to still have the constructive
medium term view that we do have.”
“We think underlying inflation pressures are fairly well
contained. And the reasons that inflation is high at the moment
are things that are either in the rearview mirror for the most
part, like tariffs, or things like the ongoing conflict” in
Iran. “The baseline which we forecast to is that those things
ultimately do moderate, and then we’re left with what we think
of as the more structural components.”
Jay Barry, head of global rates strategy at JPMorgan Chase &
Co.
JPMorgan sees the 10-year yield falling to 5.05% by year-
end and says the yield has “reverted to fair value for the first
time in six months.”
Still, Barry remains concerned that technical factors could
continue to send yields higher. The bank’s most recent “weekly
Treasury Client Survey shows our investor base remains net
overweight duration, in contrast to the periods around the onset
of other hiking cycles — even more limited ones — over the last
30 years. Given this backdrop, and that central banks are
tightening across developed markets, it raises the risk that
yields can overshoot to the upside as long positions are
unwound.”
Martin Tobias, rates strategist at Morgan Stanley
Morgan Stanley expects the 10-year yield to fall to 4.8% by
year-end. “The market is priced much more hawkish than our
economists’ probability-weighted forecast for the Fed. And just
to frame that, our bear case for 10-year Treasuries is 5.25%. So
we’ve already effectively reached that on spot, and our bull
case — which is tied to a global oil-induced recession — for 10-
year Treasuries is 3.8%. And so with market forwards essentially
having already priced the bear case, we think the risk around
Treasury yields is skewed much more favorably to lower yields.”
