Standard Chartered Expects US 10-Year Yield Drop – Coincu

Senior Investment Strategist at Standard Chartered Bank, Foo Ken Yap, on May 22, predicted a decline in US 10-year Treasury bond yields over the next year.

Standard Chartered believes rate cuts and solid corporate investment will support economic growth, even amidst fiscal concerns.

Federal Reserve Rate Cuts Expected to Support Market Growth

Standard Chartered Bank anticipates the US 10-year Treasury bond yield, currently about 4.59%, will decline to between 4% and 4.25% within a year. Foo Ken Yap explained the forecast, citing interest rate cuts by the Federal Reserve to counteract bond market impacts.

This expected decrease in yield aligns with the bank’s view that interest rate reductions will support economic stability despite fiscal challenges. The Federal Reserve is expected to lower rates by 75 basis points by the latter half of 2025.

“As of May 16, 2025, Standard Chartered continues to add to US government bonds based on their expectation that slowing growth will drive the 10-year yield to fall towards their 12-month target of 4.0-4.25%.” Standard Chartered Market Outlook

Market reactions to this forecast indicate cautious optimism. Standard Chartered remains positive about US stocks, believing strong corporate earnings will uphold market performance. Gold is emphasized as a hedge against inflationary risks, with a target price of $3500.

Historically, Standard Chartered has accurately forecasted treasury yield trajectories, drawing on consistent trends and economic signals. The bank’s projection is in line with prior predictions of yield adjustments amidst fiscal uncertainties, utilizing data on past performance.

Experts note potential outcomes include increased investment in bonds and possible shifts in US monetary strategies. SCSP Report on National Competitiveness Mid-Decade Challenges highlight such fiscal uncertainties impacting future growth strategies. Rate cuts could alleviate economic slowdowns, offering investors more security and encouraging further investment.