10-Year/2-Year Treasury Yield Curve Around First Fed Rate Cuts The U.S. yield curve typically steepens once the prospect of interest rate cuts by the Fed becomes more imminent, rather than when the Fed actually stops hiking rates. Image: Goldman Sachs Global Investment Research
Gold and U.S. 10-Year Real Rates The price of gold typically has an inverse relationship with U.S. real interest rates, as investors tend to shift their investments between gold and interest-bearing assets based on the opportunity cost of holding gold. Image: BofA Global Research
Small Cap Stocks – Relationship Between Relative Fwd P/E of Russell 2000 vs. Russell 1000 and Subsequent 10-Year Annualized Relative Returns For long-term investors, periods when small-cap stocks are trading at a significant discount to large-cap stocks may offer attractive investment opportunities. Image: BofA US Equity & Quant Strategy
10-Year U.S. Treasury Yield Macro Fair Value According to BofA’s macroeconomic framework, the fair value for the 10-year U.S. Treasury yield is estimated to be between 4.25% and 4.3%. Image: BofA Global Research
U.S. 10-Year Treasury Yield – Weekly Chart In a soft landing scenario, BofA forecasts the 10-year U.S. Treasury yield to decline to 3.78% in 2H24-1H25. It may potentially drop further to 3.22% and then reach 3.00%. Image: BofA Global Research
U.S. 10-Year Treasury Yield The 10-year U.S. Treasury yield has been in a secular bear market since February 2022, and it could potentially approach 6% in the coming years. Image: BofA Global Research
Forecast – U.S. 10-Year Treasury Yield According to consensus, the 10-year U.S. Treasury yield is expected to reach 4.20% by the end of 2024. Image: The Daily Shot
U.S. 10-Year Treasury Yield – Daily Chart Given the combination of inflationary pressures, Fed monetary policy, and economic growth, is there potential for the U.S. 10-year Treasury yield to go higher over the next few weeks? Image: BofA Global Research
U.S. 10-Year Treasury Yields Forecast According to Goldman Sachs, the 10-year U.S. Treasury yield is expected to reach 4.25% by the end of 2024, a forecast that differs slightly from the expectations of the futures market Image: Goldman Sachs Global Investment Research
Average 1-Month S&P 500 Return vs. Change in 10-Year U.S. Treasury Yields When U.S. Treasury yields rise quickly, the S&P 500 typically faces challenges due to factors like decreased stock valuation multiples, especially for expensive mega-cap growth companies linked to low rates. Image: Goldman Sachs Global Investment Research