Traders Brace for Treasury 10-Year Yield at 5% as Mood Sours

Traders are piling into bets that long-term Treasury yields will surge on concerns over the US government’s swelling debt and deficits, a situation made more precarious by President Donald Trump’s tax-cut bill.

The murky economic outlook is fueling hedging activity in Treasury options, with investors targeting higher rates on longer-dated bonds by the end of the year. The latest spurt of downside wagers echoes sentiment on Wall Street where strategists from Goldman Sachs Group Inc. to JPMorgan Chase & Co. are lifting their forecasts for yields.