Tuesday, June 19, 2012

Where Will 10-Year Treasury Yields Go? Let's Ask An Economist

From Doug Short's Advisor Perspectives:

WSJ Economists' 10-Year Yield Forecasts:
The Growing Spread

Earlier this week the Wall Street Journal posted the results of its June Survey of economists (xls file). In the past my main interest in these forecasts has been the GDP estimates. But today my attention is fixed on the estimates for 10-year yields. The various Federal Reserve strategies in recent years (ZIRP, QE1, QE2 and Operation Twist) have focused on lowering interest rates, for which the 10-year note yield is an interesting "tell"....MUCH MORE

...As I type this, the CBOE Interest Rate 10-Year (TNX) is hovering around 1.61, two basis points above yesterday's 1.59 close according to Treasury data. The mean (average) of economists' estimates grows from 2.12 at year's end to 3.47 in December 2014. At the high end of the range, one economist sees the 10-year yield above 5% by the end of next year....

Let's ask a climatologist:

(that's actually various models of the El Niño/Southern Oscillation)