The Treasury yield curve is set to steepen, driven by short-term debt, Citi interest rate strategists said in a note. In a "steepening bull market", short-term interest rates fall faster than long-term rates. "We have a steepening bias for the 2026 bull market as unemployment increases or labour force participation continues to rebound," the strategists said in a note.
As a result, Citi strategists believe the market should have priced in expectations of further Fed rate cuts in the second half of the year, which will keep the "belly" - the middle of the curve - steady. "Against a strong economic backdrop, combined with a dovish Fed and growing concerns about supply, the yield curve should steepen further." (Golden Ten)
Citi: Driven by short-term debt, the US Treasury yield curve is expected to steepen
2025-12-15 06:52:08
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