US Rate Odyssey Takes a Sharp Turn Higher

Year-ahead consensus predictions rarely get things perfectly right, but this year's forecast for lower interest rates is looking particularly off target. Despite a promising start to the year, the 10-year US Treasury yield has risen sharply against expectations it would fall. The Federal Reserve may soon begin hiking interest rates again instead of cutting them further.

The effects of this 'miss' are being felt across various sectors: a flatter yield curve, stagnant housing market recovery, and a decline in consumer confidence. These developments are at odds with the original consensus predictions for lower interest rates.