Ed Yardeni, president of Yardeni Research, says US 10-year Treasury yields are "very attractive" at around 5% as inflation is expected to cool. Speaking to Bloomberg Television, Yardeni expressed optimism that productivity gains will bring inflation down, making a real return of 2.5% "pretty good in the bond market." He forecasts the 10-year yield trading between 4% and 5%, a range typical before the global financial crisis. This outlook comes as Treasuries gained for a second day following a Democratic sweep in the midterms, which fueled expectations the Trump administration's tax and spending plans may be contained.
Yields across the benchmark dropped at least four basis points, with the 10-year falling to 4.84%, the lowest since September 10. Yardeni, known for popularizing the "Fed Model" framework comparing S&P 500 earnings yields to the 10-year US yield, noted interest rates are now "back to being normal for longer.".
Source: Bloomberg Markets · Summarized by HeadlinesBriefing