BofA Raises Year-End US 10-Year Treasury Yield Forecast to 5% From 4.5%

Bank of America has raised its year-end forecast for the US 10-year Treasury yield.

Walter Bloomberg reported on September 24 that Bank of America lifted its year-end target for the 10-year Treasury yield by 0.5 percentage point to 5.0% from 4.5%. The bank also raised its forecast for the US 2-year Treasury yield to 5.0%.

It cited geopolitical risks tied to Iran, concerns about US federal government finances and uncertainty surrounding artificial intelligence as reasons for the upward revision.

Bank of America also raised its Brent crude price forecast for the second half of the year to $95 a barrel.

The US 10-year Treasury yield rose 0.17 percentage point from the previous session to 5.14% on September 23, the highest level since 2007.

The 5-year Treasury yield also jumped as much as 0.20 percentage point intraday to 5.03%, topping 5% for the first time since 2007.

Bond yields and prices move in opposite directions, meaning higher Treasury yields imply lower bond prices. If long-term US Treasury yields remain elevated, they could push up discount rates for risk assets such as stocks and cryptocurrencies.