US Yields Underestimate ‘Adverse Fiscal Dynamics,’ Barclays Says
- Estimates deficit is worth 50 to 75 basis points at long end
- Its yield forecasts for end-2024 are higher than forwards
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The bond market is too sanguine about the US fiscal picture, Barclays strategists said in an annual outlook released Thursday.
“Current yield levels are not fully reflecting the adverse fiscal dynamics, which may be worth 50-75bp on long-term yields,” rate strategists and economists led by Anshul Pradhan and Marc Giannoni, respectively, wrote in the report.