Goldman expects 10-year Treasury Yields to be 4% or higher until 2024

The Federal Reserve System is fighting inflation and limiting the economic downturn successfully, so U.S. benchmark bonds will trade at 4% yield level or higher. According to Goldman Sachs Group Inc. this will last until at least the end of 2024.

Praveen Korapaty, Goldman Sachs chief rate strategist explained that the yield forecasts are based on the absence of a visible recession and analysts believe that inflation will still be above the FRS target. In his view, monetary policy easing is unlikely if there is no recession and inflation is above the FRS target.

10-year Treasury bond yields have been trading at 4% or higher in 2022 since late September for 23 days. Currently, it is around 3.75%.

Currently, the target rate level is in the range of 3.75% and 4%. According to swap traders, approximately in June, the base rate will peak at slightly more than 5%. Officials will increase it first and then decrease it to about 4.6% by the end of 2023.

During the last days, growing speculation about the slowdown in the FRS rate increases caused the decrease in the yields of 10-year bonds. On October 21, they reached their highest level since 2007 with 4.34%.