10-year US Treasury yields to race higher towards 3.3% by year-end – Commerzbank

The benchmark 10-year US Treasury yield closed in the red for the second straight day on Wednesday. Still, economists at Commerzbank expect the 10y US-T yields to lurch higher towards 3.3% by end-2022.

Fed is likely to hike rates at each meeting and by 50bp in May and June

“We expect 10y US-Treasury yield to edge up to 3.3% by year-end as the Fed is likely to hike rates at each meeting and by 50bp in May and June.”

“We expect the very low real yield environment to persist. To be sure, real yields will most likely also be subject to larger fluctuations, rising in coming months as central banks are determined to get back ahead of the curve.”

“We don't expect the euro area to escape negative real yields in the longer-term, as monetary policy remains too loose on average.”