The Bank of America (BofA) recently highlighted odds of the Fed rate hike in the next 3 or years, or even sooner, considering the 10-year bond yields and the economic transition.
The U.S. bank quotes Fed Chair Jerome Powell while initially defying the rate hike odds before saying, “the market is thinking about it, and we are starting to see that dynamic come back in play driving 10y rates higher."
“While it seems almost crazy to imagine the Fed hiking rates, the fact is that 10y rates incorporate Fed policy expectations over the full span of the next 10 years, and it is not unreasonable to imagine the Fed embarking on a hiking cycle within 3 or 4 years of today, or even sooner if everything goes right with the pandemic and the economy,” mentioned the report further.
It’s worth mentioning that the U.S. 10-year Treasury yields drop 1.7 basis points to 0.85% by the press time of early Wednesday. The yields declined after refreshing the eight-month high the previous week.
Reprinted from FXStreet，the copyright all reserved by the original author.
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