Published research this week leans bearish on US Treasury prices, with most analysts expecting yields to grind higher — though a notable contrarian voice sees room for a gradual decline.
The bear case rests on three forces, according to recent research. First, a wave of new bond supply, including a $25bn multi-tranche Amazon deal on top of heavy Treasury issuance. Second, NY Fed one-year inflation expectations jumping to 3.7%, the highest since mid-2022. Third, one camp of analysts explicitly forecasts a 75bp Fed hike by year-end under a Warsh-led FOMC that has dropped its easing bias, with core PCE still above 3%. Some published views target the 10Y at 5–5.2%, while others see it rangebound at 4–4.5% with upside risk. Analysts also note leveraged funds have built record short positions in rate futures.
The contrarian thread argues real yields near 2% are roughly double most neutral-rate estimates, making 5Y TIPS attractive, and favors curve steepeners — long the belly, short the 30Y — on disinflation and falling energy prices.