Wells Fargo’s Michael Schumacher projects US 10-year Treasuries to end this year at a high of about 2.20%. 10 Year Treasury is down -0.004%, DXY is up +0.28%.
Despite Treasury yields falling temporarily this week following Fed’s decision on rates, Schumacher says uncertain high inflation outlook will see it rise this year.
Schumacher attributes the biggest risks to the bond market and the economy as the potential response by the Fed to a robust economic recovery.
The Wells Fargo analyst says Fed could hike rates as early as next year, earlier than 2023 it had suggested.
When 10-year yields were below 1%, Schumacher projected it could reach a high of 1.15%-1.35% or even 1.50%, a prediction which came true when yields closed at 1.51% on Thursday.
Schumacher also doubts the recent surge in the dollar, warning that as countries catch up in vaccinations, the US currency could lose ground.