Market news
07.01.2022, 03:21

Treasury yields surge likely to be capped by ‘new conundrum’ – Goldman Sachs

Analysts at Goldman Sachs believe that the bond market will be reluctant to lift the terminal rate even as the Federal Reserve hikes rates in the coming year.

Key quotes

“There are two possible explanations” for the new bond market conundrum, “a widely prevalent low terminal rate view, or that the price signal is distorted by supply/demand imbalance.”

“The imbalance between supply and demand is “a more compelling” explanation, adding that it’s “one that will take time, and some rate hikes to resolve, leaving the long end relatively sticky over the course of the year even as front-end yields reprice materially higher.”

“Goldman has increased its year-end estimate for the policy sensitive two-year note yield to 1.35%, from 1.15%, as its economists now project “three hikes by the end of 2022, and a steady three hikes per year pace thereafter.”

“Project the five-year note to end 2022 at 1.8%, the 10-year to climb to 2% and the 30-year to reach 2.25%.”

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location