US Treasury yields dominated the conversation this week, with most published research arguing the long end has further to climb.
Several strands of analysis pointed to 10-year yields staying elevated or pushing higher — citing resilient growth, sticky inflation, heavy issuance, soft auction demand, and AI-driven capex that keeps capital scarce. One fair-value model cited put the 10-year near 6%, and multi-year strategic calls for 6%+ yields resurfaced. A weak auction paired with hawkish FOMC minutes was flagged as a setup that could put 5.5% in play on the 10-year. Short-duration positioning was a recurring recommendation, and credit watchers noted investment-grade spreads widening off historically tight levels, with high-yield spreads moving sharply wider — a signal some read as early stress.
A contrarian thread argued yields are stretched three standard deviations above long-term averages and historically mean-revert, framing current levels as an entry point for duration and municipals. A separate view saw any credit event or equity unwind triggering a flight-to-safety bond rally.