Published research this week leans toward higher US Treasury yields, though a notable minority sees the long end eventually falling.
The dominant view from analysts ties the call to a hawkish shift at the Fed under new Chair Kevin Warsh — including the removal of forward guidance and a more hawkish dot plot. Market-implied odds of a September hike jumped from 27% to 73%, with nine of 18 policymakers now penciling in hikes this year. Researchers argue this pushes front-end yields higher and adds risk premium across the curve.
On the 10-year, one camp of analysts sees yields pressing toward 5%, arguing the bond market — not the Fed — is setting rates amid sticky inflation, heavy AI-related corporate issuance, and fiscal sustainability concerns. A year-end 2026 forecast of 4.65% has been published in this vein.
A contrarian thread of recent research takes the other side: if Fed inflation credibility holds or productivity-driven disinflation arrives, long yields drift lower over 6–12 months. One published view sees Fed Funds at 3.63% by end-2026.
The real divide is about trust in Fed credibility versus structural supply pressures.