Barclays advises investors to position themselves for rising U.S. Treasury yields

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GoldDerby Finance reported that on June 23, after the Federal Reserve shifted to a more hawkish stance last week, Barclays rate strategists advised clients to position themselves for higher U.S. Treasury yields. The Barclays team raised its target yields for U.S. Treasuries across all maturities by about 35 basis points, which is consistent with the revisions made by the firm’s economists. Barclays economists had once predicted that the Federal Reserve would cut rates in 2027, but now believe Federal Reserve policy will remain unchanged. In addition, Barclays strategists Anshul Pradhan and Demi Hu wrote later last week that the Fed’s move—under Chair Kevin Wosch—away from forward guidance has led to an increase in the “risk premium generated through uncertainty channels.” The firm recommends an entry level of 4.15%, which effectively bets that the relevant rates will rise. Barclays’ latest yield forecast assumes the Federal Reserve will keep interest rates unchanged. The firm bets that the 10-year Treasury yield will reach 4.65% by mid-2027, up about 15 basis points. They noted that in other scenarios, if the Federal Reserve raises rates by 100 basis points due to strong economic growth and sticky inflation, the 10-year Treasury yield has room to rise to about 4.9%.
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