US Treasuries spent the week caught between a dovish "rates are too tight" camp and a hawkish "supply, sticky inflation, and a Fed Chair transition" camp — with no clean winner.
On the dovish side, researchers argued the Fed is behind on easing as oil-driven inflation fades, with published forecasts pointing to the Fed Funds rate drifting toward roughly 3.13% by end-2026, the 1Y T-bill near 3.10%, and about half the post-war rise in 2s and 10s reversing. A medium-term bullish call on Treasuries leaned on softer energy prices and progress on US-Iran talks.
The hawkish thread was just as loud: analysts flagged elevated core inflation, resilient growth, and the possibility the June FOMC removes its easing bias — with some expecting "insurance" hikes under incoming Chair Kevin Warsh. Structural arguments for higher long-end yields (heavy issuance, smaller Fed balance sheet, weaker fiscal backdrop) reinforced a steeper-for-longer view at the 30Y.
Late in the week, a modest tilt emerged toward lower front-end yields as oil and geopolitical risk premia eased.