Published research is coalescing around a near-term drift higher in US Treasury yields, with one widely cited base case putting the 10-year at 5.25–5.50% into early 2027 before easing back toward 4.50–4.75%.
The bearish camp points to October's hot CPI print, widening fiscal deficits, heavy issuance (including from hyperscalers crowding out other borrowers), and year-end fiscal fights that some analysts argue could push the 10-year back above 5%. Weak auctions and sticky inflation are the main near-term risks flagged.
A contrarian thread of recent research sees bonds as a defensive hold: if the AI capex boom slows, or if energy and inflation roll over, yields could grind lower, with one view mapping a path from 4.88% to 4.65% by end-2027.
On the Fed, the consensus expects a 25bp hike in December; a minority view keeps 50bp on the table if inflation surprises, while others see a pause in 2027 and a first cut only late that year.
In credit, published views lean toward investment grade and munis near 6% yields, with securitized products and EM debt preferred over richly priced high yield.
By the numbers:
• Positioning (CFTC, as of 3 Nov 2026): Speculators (leveraged funds) are net short in all four contracts. US Treasury bond has the smallest net short in a year (COT index 94); US 2-year note (75) and US 5-year note (71) are near the top of their 52-week range; US 10-year note (19) 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 4.98%, 2-year 4.73% (U.S. Department of the Treasury, 10 Nov 2026).
Charts: finchiefs.com/data/policy-rates/federal-reserve