Published research is leaning heavily toward higher US Treasury yields across the curve, from the 2-year to the 10-year. The drivers cited: persistent Fed hawkishness, heavy government borrowing, and still-solid economic data.
Several recent notes attribute the move above 5% on the 10-year to deficit spending, defense outlays, and no credible fiscal consolidation plan. One updated forecast pins year-end at 5.1%, with an extreme scenario of 5.25–5.50%. Analysts also point to weak Treasury auction demand and AI-related capital spending as structural forces pushing the price of money higher.
The curve is a live debate. Some strategists favor steepeners, arguing further hikes would quickly tip the economy into recession and force a Fed pivot. Others note the curve remains near inversion — historically a recession signal.
On credit, one camp flags widening high-yield spreads (triple-C now above 500bps over fed funds) as early stress, while arguing distressed investment-grade names — especially in tech and data centers — could become compelling if a yield spike forces Fed easing.