Major asset manager makes bold interest rate prediction for 2025
The 10-year Treasury yield has climbed 31 basis points year to date.
The 10-year Treasury yield has climbed 31 basis points year to date.
The U.S. dollar rose to a fresh 2-1/2-month high on Tuesday, continuing its recent ascent on expectations the Federal Reserve will temper its interest rate cut path, while investors positioned ahead of an apparently tight U.S. presidential election. The greenback has risen for three straight weeks and is on track for its 15th gain in 17 sessions as a run of positive economic data has diminished expectations about the size and speed of rate cuts from the Fed, which has pushed U.S. Treasury yields higher. The yield on the benchmark 10-year U.S. Treasury note reached 4.222% on Tuesday, its highest since July 26.
Treasury yields climbed by the most in weeks on Monday as markets continued to recalibrate their interest rate expectations while assessing the likelihood of a soft landing for the U.S. economy.
A soft landing for the U.S. economy could have serious implications for the Treasury market, as per analysts at BCA Research. In the note, the analysts say that with recent positive economic data pushing the 10-year Treasury yield into what they define as the “Soft Landing Zone,” investors may see stabilization in yields even as the economy avoids recession. As BCA’s analysts note, in such a scenario, the Fed's easing of monetary policy would continue, but without a full-blown recession requiring aggressive cuts.
The 30-year mortgage rate is averaging 6.44%, Freddie Mac said in its latest weekly survey on Thursday.
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(Reuters) -Wall Street's main indexes closed lower on Thursday as investors looked to higher-than-expected inflation and unemployment claims for indications on the health of the U.S. economy and the path for interest rates. In a separate report released on Thursday, jobless claims also rose to 258,000 for the week ending Oct. 5, versus an estimate of 230,000. "Investors were torn between a stronger than expected CPI report and a weaker than expected unemployment claims report," said Jack Ablin, chief investment officer at Cresset Capital in Chicago.
The 30-year fixed-rate mortgage was 20 basis points higher than a week earlier when it averaged 6.12%, mortgage finance giant Freddie Mac said on Thursday. The reversal comes after mortgage rates declined steadily since May as investors geared up for the Fed to begin a rate-cutting cycle, which it began last month.