Citigroup Economic Surprise Index vs. 10-Year Treasury Yield This chart shows a good correlation between Citigroup Economic Surprise Index and 10-year Treasury yield. Lower yields ahead? You may also like “For the Last Few Years, Equity Markets Have Been Leading Bond Markets.” Image: Yardeni Research, Inc.
Treasury Volatility – MOVE Index The decrease in U.S. rates volatility around a 3-year low, as indicated by the MOVE index, could be viewed as a positive development for both the bond market and the overall economy. Image: Deutsche Bank
Long History of U.S. 10-Year Treasury Yields Despite expectations of rate cuts, U.S. interest rates could move in either direction, depending on inflation and Fed decisions. Image: Goldman Sachs Global Investment Research Click the Image to Enlarge
10-Year U.S. Treasury Yield vs. U.S. Dollar Index (DXY) While the strong relationship between U.S. Treasury yields and the dollar has lasted for over a year, investors should remain aware that market dynamics can shift rapidly. Image: Morgan Stanley Research
Two-Month Correlation Between Bloomberg U.S. Treasury Index and S&P 500 Index The current positive correlation between stocks and bonds emphasizes the need for investors to diversify beyond traditional assets and adopt more sophisticated risk management strategies. Image: Morgan Stanley Wealth Management
U.S. 10-Year Treasury Term Premium The increasing term premium suggests investors require greater compensation for longer-term bonds, reflecting heightened interest rate and inflation risks associated with extended durations. Image: Morgan Stanley Wealth Management
Valuation – S&P 500 Forward P/E Ratio vs. 10-Year U.S. Treasury Yield The 10-year U.S. Treasury yield surpassing 4.5% is creating a headwind for equity valuations and potentially dampening investor sentiment. Image: Morgan Stanley Wealth Management
Average U.S. 10-Year Treasury Yield Performance in Fed Rate Cut Cycles Since 1966, the current Fed easing cycle has resulted in the second-worst performance of 10-year U.S. Treasury bonds. The only period with worse performance was in 1981, during Chairman Paul Volcker’s aggressive measures to combat inflation. Image: Deutsche Bank
Copper to Gold Ratio and U.S. 10-Year Treasury Yield (Leading Indicator) The copper/gold ratio and the 10-year U.S. Treasury yield are showing signs of a persistent divergence. Image: Morgan Stanley Research
Survey – Where Do You Expect 10-Year U.S. Treasury Yields to Be One Year from Now? The average yield for the 10-year U.S. Treasury is projected to be around 4.2%, with only 4% of respondents believing that yields will exceed 5% by the end of 2025. Image: Deutsche Bank
10-Year U.S. Treasury Yield Fair Value The fair value model for the 10-year U.S. Treasury yield, based on market variables, suggests a fair value close to 4.10%. Image: Deutsche Bank