T. Rowe Raises Prospect of 6% Treasury Yields on Fiscal Risk
- Benchmark yields likely to rise on tax cuts, fiscal expansion
- Foreign demand for Treasuries is also falling, Husain writes
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Treasury 10-year yields may climb to 6% for the first time in more than two decades as US fiscal woes worsen and Donald Trump’s policies help keep inflation elevated, according to T. Rowe Price.
The benchmark yield may first reach 5% in the first quarter of 2025 before potentially climbing further, Arif Husain, chief investment officer of fixed-income, wrote in a report. Husain is doubling down on calls for higher yields, citing persistent US budget deficits as Trump cuts taxes during his second presidency, as well as potential tariffs and immigration policies that would sustain price pressures.