Published research this week points overwhelmingly in one direction on US Treasuries: yields are heading higher across the curve, from the 2-year out to the 30-year.
Analysts point to a rare convergence of forces. Strong US data (manufacturing and services activity both beating expectations), firmer oil prices, and hawkish Fed communication — including explicit guidance from Governor Barr on further hikes — are driving the move. Several research notes also flag weak demand at recent Treasury auctions, particularly the 5-year, as amplifying the selloff.
A structural camp adds fiscal weight to the story: widening deficits, heavy capital needs tied to the AI investment cycle, and shorter debt maturities could keep yields elevated well into 2027. One notable thread argues the rise is being driven by real yields repricing US growth potential, not just inflation fears — a view where inflation breakevens could actually narrow even as nominal yields climb.
Near-term targets in circulation put the 10-year at 5.25–5.50%, with some published views seeing a push well above 5%. The lone tactical dissent hinges on a short squeeze, not a fundamental reversal.