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Goldman raises U.S. Treasury yield forecasts on more hawkish Fed

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Goldman raises U.S. Treasury yield forecasts on more hawkish Fed

Goldman Sachs said on Thursday that it has raised its forecasts on U.S. Treasury yields for this year, citing more broad-based and persistent price pressures and a more hawkish pivot by the Federal Reserve.

The investment bank now expects benchmark 10-year yields to rise to 2.7% by year-end, up from its previous forecast of 2.25%. It also expects two-year yields to rise to 2.9% and 3.15% at year-end 2022 and 2023, respectively.

For 30-year bonds, the bank expects a more gradual increase, with the yields likely to end 2022 at 2.75%.

Goldman also expects the yield curve between two-year and 10-year notes to invert modestly by year-end, but said that should not necessarily be taken as an indicator that a recession is likely to follow.

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