Treasury Yields Approach 5% as Long-Term Rates Climb

Analysts predict sustained upward pressure on Treasury yields in 2025, influenced by Federal Reserve policies and fiscal uncertainty.

The 10-year Treasury yield reached 4.613% on Tuesday, its highest level since May, signaling ongoing pressure on long-term debt markets.
Federal Reserve officials reduced their projected interest rate cuts for 2025 from four to two, contributing to expectations of elevated yields.
Analysts, including Mohamed El-Erian, suggest that 10-year yields could trade in the 4.75-5.00% range next year, with potential for further increases.
Rising yields have implications for equity markets, as higher rates may divert investments from stocks, compress valuations, and dampen borrowing.
The bond market is experiencing a steepening yield curve, with the gap between 10-year and 2-year yields nearing its widest point since 2022.