Published research this week is overwhelmingly pointing to higher US Treasury yields — especially at the short and middle of the curve — after a hawkish shift from the Fed.
The trigger: the updated dot plot under Chair Kevin Warsh, with nine of eighteen FOMC members now projecting at least one rate hike in the second half. Analysts across the published research broadly read this as repricing 2-year and 5-year Treasuries higher. Core inflation isn't expected to hit 2% even by 2027 in one widely-cited view, reinforcing a "higher for longer" stance. A structural argument is also gaining traction: massive issuance to fund AI infrastructure plus large deficits should keep upward pressure on yields. One contrarian thread pegs fair value on the 10-year as high as 5.75%.
Not everyone agrees. A minority view argues the long end actually drifts lower over a strategic horizon as Fed cuts eventually come into view, and one scenario-conditional take suggests a smaller 25–50bp hike could rally bonds by reinforcing Fed credibility. Credit spreads and inflation breakevens are the other key fault lines.