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23.03.2021, 08:20

U.S. 10-year Treasury yield could hit 2% - experts

CNBC reports that according to Jurrien Timmer of Fidelity Investments, U.S. 10-year Treasury yield could inch higher, but that may not pose a risk to financial markets.

“I think yields could push a little higher. So far, they’ve (got) up to about 1.75%. I have a simple bond model that suggests 2% should be the upper limit,” Timmer told.

Timmer also downplayed worries that the recent rise in bond yields and inflation expectations could mean a repeat of the 2013 “taper tantrum.” That was when Treasury yields spiked suddenly because of market panic after the Fed said it planned to start tapering its quantitative easing program.

“So far, yields have gone up 125 basis points. Half of that is real yields. Half of that is inflation. I think for now that that’s okay, ” Timmer said. In 2013, “it was all real yields that moved up almost 200 basis points in six weeks. If we saw something like that happen, that will be a pretty big shock to the system,” he added.

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