BNY Investments sees room for further rise in Treasury yields
BNY Investments notes that in seven prior Fed tightening cycles, Treasury yields typically climbed and the curve flattened after the first rate increase. Those moves often settled within three to six months. U.S. Treasury yields have recently reached multi-decade highs.
BNY Investments suggests Treasury yields may still have room to climb. Its view draws on how yields behaved during earlier periods when the Federal Reserve raised rates.
In seven past tightening cycles, yields generally increased after the first hike, while the curve flattened. These patterns often stabilized within three to six months. U.S. Treasury yields have recently touched multi-decade highs.
Higher Treasury yields could influence borrowing costs throughout the economy, affecting households, businesses, and governments with debt or financing needs. Investors may reassess stock and bond valuations as yields become more attractive. The impact may vary by exposure and income. A sustained rise could weigh on spending and investment, though timing and magnitude remain uncertain.