HSBC Sees Treasury Yield at 4.65%, Not 6%, by Year-End

HSBC has revised its forecast for the 10-year Treasury yield downward, now predicting it will reach 4.65% by year-end, not 6% as previously thought.

The bank's decision comes after the yield fell to 4.951% on Monday, retreating from last week's 19-year high of 5.041%. HSBC raised its entire Treasury curve forecast this month, increasing the two-year year-end forecast to 4.20% and the 10-year target to 4.65%.

Despite the revised forecast, HSBC still expects the Federal Reserve to hold rates through 2027 as its base case, but now sees near-even odds of a hike this cycle.

Other forecasters disagree on the destination, with iCapital predicting 5.3%, Deutsche Bank targeting 6%, and Miller Tabak's Matt Maley calling 4.8% the more urgent test.