Reuters poll: Long-term U.S. Treasury yields are expected to remain high as inflation and debt pressures weaken interest rate cut expectations

A Reuters poll of 75 bond strategists showed that short-term Treasury yields are set to fall in anticipation of a cut in interest rates, while long-term yields are expected to be resilient, given stubborn inflation, ballooning deficits and concerns about the Fed's independence. The median estimate for the benchmark 10-year Treasury yield is currently around 4.0%, fluctuating around 4.10% in three and six months, and is expected to rise to 4.17% in a year's time, according to the survey. A sustained rise in long-term yields could further worsen Washington's rapidly deteriorating fiscal position. With economic growth still strong and inflation well above the Fed's 2 percent target, many analysts say policy is not sufficiently restrictive to justify the current expectations of five rate cuts between now and 2026 reflected in the interest rate futures market. They warn that easing too much too soon could reignite inflationary pressures and send yields soaring at a time when the labor market is starting to weaken.