Published research this week leans bearish on US Treasuries, with most analysts expecting yields to grind higher — though one contrarian voice sees a dovish pivot ahead.
The core argument across several research desks: renewed Middle East tensions are pushing oil higher, reigniting inflation fears, and forcing markets to reprice Fed tightening risk. Researchers note the 2-year yield has climbed as traders now fully price a hike by late October, with roughly 34bps of tightening baked in by the December FOMC. One camp flags Fed Chair Warsh's upcoming congressional testimony as a pivotal catalyst. A structural argument adds that long-end yields face persistent upward pressure from credit risk and Fed credibility concerns.
On credit, several published views are constructive on US high yield over a 3–5 year horizon, citing attractive carry and shorter duration, though one cautionary thread warns spreads could widen sharply if ETF liquidity stress emerges.
The dissent: a contrarian analyst argues Warsh's FOMC will prove dovish in aggregate, setting up a bond bull market in coming quarters.