See USTs trending down over next twelve months

Genevieve Signoret

Fixed Income

Under our central scenario assumptions, in which Greece does not default or leave the euro area this year, we expect yields to move up for all maturities and the curve to flatten. We see U.S. Treasuries trending down now for the next 12 months.

Of course, if Greece does default and exit, the Fed will postpone the start of normalizing (its first hike) for up to a year, and the yield curve will not shift. It will remain anchored at zero and flatten.

We have updated our forecast table to include the end-Q1 yield on a 10-year U.S. Treasury bond.

We hold to our central scenario monetary policy views as seen in that same table.