Published research is split on where US Treasury yields head next — and that disagreement is the story.
Post-midterm, more analysts lean toward lower 10-year yields in the near term, arguing a divided Congress blocks fresh deficit spending and tax cuts, while softer oil and AI-driven safety flows add support. But a sizeable contrarian thread warns of higher yields, pointing to $2 trillion-plus deficits, heavy Treasury supply, hyperscaler borrowing for AI build-outs, and energy risk if Middle East tensions escalate. Some recently published work sees the term premium rising if AI borrowing keeps climbing.
On duration, views range from favoring longer Treasuries near 5% yields, to preferring intermediates, to staying neutral — with one carry-to-risk analysis flagging the 10-year as unattractive.
Credit views lean cautious. The consensus expects the weakest borrowers (CCC-rated) to see spreads widen as higher-for-longer rates bite, though one camp sees investment-grade spreads tightening if the AI build-out slows. Short-duration high yield has its defenders.
By the numbers:
• Positioning (CFTC, as of 27 Oct 2026): Speculators (leveraged funds) are net short in all four contracts. US Treasury bond has the smallest net short in a year (COT index 100); US 2-year note (83) and US 5-year note (86) are near the top of their 52-week range; US 10-year note (26) is near the bottom of its 52-week range.
• Federal Reserve policy rate 3.75–4.00%, last move +25 bp on 17 Sep 2026. Next decision 9 Dec 2026.
• United States 10-year yield 4.84%, 2-year 4.46% (U.S. Department of the Treasury, 5 Nov 2026).
Charts: finchiefs.com/data/policy-rates/federal-reserve