FED SEEN AS UNLIKELY TO HIKE
Strong U.S. macro data and a hawkish Fed makes investors wonder how much higher Treasury yields could go, Bank of America economists write.
The bankās forecast for the 10-year yield this year is 4.75%, higher than the current level of 4.67%. The BofA economists say the benchmark yield could rise above 5%, depending on Fedās reaction to inflation data, but it is unlikely to cross 5.25%. If the CPI goes against Fed expectations and rises, a hike could happen. āIt is possible but is a high bar,ā they write.
They say 10-year rates around 5% āwould be an attractive buy assuming CPI remains sticky or a little lower.ā