Treasuries Triple Global Returns as Dealers Predict Decline

After failing to predict this year’s Treasury rally, Wall Street’s biggest bond traders are sticking to forecasts that government bonds will fall as the economy recovers and concerns over a European debt crisis recede.

Yields on 10-year Treasury notes will rise to 3.5 percent by the end of 2011 from this year’s low of 2.84 percent on June 27, according to a Bloomberg News survey of the 20 bond dealers that serve as counterparties to the Federal Reserve in its open market transactions. The higher rate is still only half the 7 percent average on the securities over the past four decades.