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BofA Sees Path to 10-Year Treasuries Yielding 2% as US Cools Off

  • Level could be reached in six to 12 months, strategists say
  • A global slowing in growth may also exacerbate demand
Updated on

Yields on 10-year US Treasuries could reach 2% within the next six to 12 months amid more significant economic slowdown, according to Bank of America Corp. 

The market’s recent focus toward deteriorating growth fundamentals and away from inflation has helped push the 10-year yield to 2.6%, consistent with the bank’s fair value range of 2.35% to 2.65%. Even if the Federal Reserve is able to steer the US economy to a soft landing, the market’s tendency to outweigh the downside may support duration closer to 2%, strategist Bruno Braizinha wrote in a note to clients Monday.