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Closer Fed Gets to Rate Boost, Less Bearish Bond Economists Get

Why fear Yellen?
The Marriner S. Eccles Federal Reserve building stands in Washington.
Photographer: Andrew Harrer/Bloomberg
Updated on

The bond market's best and brightest keep walking back their bets on how fast Treasury yields will rise.

Even with the Federal Reserve poised to begin raising interest rates for the first time in almost a decade, economists at the world's biggest bond shops now say they don't see benchmark yields reaching 3 percent until the fourth quarter of next year, according to a Bloomberg News survey. As recently as December they were calling for Treasury 10-year yields to top 3 percent by year-end.