Dutch International: Neutral View on US Treasuries in the Short Term, Looking for Opportunities to Short 10-Year US Treasury Notes.

The interest rate strategists at the Netherlands International Group currently maintain a neutral stance on US bonds in the short term. They point out that the core PCE quarter-on-quarter growth rate, which will be released on Friday, may be relatively moderate, expected to be 0.2%. This data may boost market optimism in the short term, leading to a decrease in US bond yields. The strategists predict that by 2026, the yield on 10-year US bonds will rise to 4.5%. "We are looking at an opportunity to shift to a more bearish position on 10-year US bonds at the right time." They explain that the Federal Reserve is not showing too much concern about the economic growth outlook, and the latest unemployment claims data also indicate that the outlook for the current job market is not entirely bleak. At the same time, inflation data is expected to start rising, and supply-side pressures continue. Taken together, these factors actually point to an increase in yields.