Citi: Short-term debt drives US Treasury yield curve to steepen

MarsBitNews · 2025-12-15T06:58:32+00:00

Citigroup rate strategist pointed out that driven by short-term debt, the U.S. Treasury yield curve may steepen, with short-term interest rates falling faster than long-term rates. As unemployment risk rises, the bull market is expected to continue through 2026, and the market has priced in the Federal Reserve's rate cuts. In a strong economic environment, the yield curve may further steepen.

MarsBitNews

2025-12-15 06:58:32

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Mars Finance News: Citi rate strategist stated in a report that, driven by short-term debt, the U.S. Treasury yield curve is expected to steepen. During a “bull market steepening,” short-term interest rates decline faster than long-term rates. The strategists mentioned in the report: “As unemployment rises or labor force participation continues to rebound, the risk of unemployment increasing is growing, and we favor a steepening trend for the 2026 bull market.” Therefore, Citi strategists believe that the market has already priced in the Federal Reserve’s expectation of further rate cuts in the second half of this year, which will keep the “belly” (the middle part of the curve) stable. “In a strong economic backdrop, combined with a dovish Fed and increasing supply concerns, the yield curve should further steepen.” (Jin10)

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