THE hawkish pause by the Fed’s Federal Open Market Committee has worried investors that more rate hikes may be in the offing from the US central bank.
However, we believe investors should be increasingly concerned that longer-dated yields, comparatively well-behaved for much of the year, will continue to rise.
Several factors are set to push such yields towards 5 per cent and potentially beyond as we enter 2024, we predict.
First, investors must recognise that the normalisation of longer-dated yields, which started in 2022, is only partially complete. Indeed, the move from sub-1 per cent yields on 10-year US Treasury bonds reflects the rise in short-term policy rates which has put upward pressure...
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