Treasury yields are pulling in two directions at once, according to recent third-party research — softer in the near term, but stickier or higher over the medium term.
The case for lower yields leans on cooling data: a softer PCE print, weaker new home sales, and a GDP revision miss. Some analysts argue the 2Y's recent pullback could lead a broader move down, and watch whether the 10Y breaks below 4.25%. A confirmed US-Iran deal and a reopened Strait of Hormuz would, in one conditional view, reinforce that by unwinding hike pricing. A separate H2 call ties falling yields to broader equity leadership.
The bear case is anchored in fiscal math. Several published views flag US debt sustainability and term-premium repricing as keeping long-end yields elevated, with fed funds futures now pricing hikes through 2028. One base case has the 10Y BBB corporate spread widening to 1.87 by end-2026.
On credit, the consensus is that IG and HY spreads stay tight, with CMBS flagged as the rare pocket of value as spreads sit above long-run averages.