Analysts at Barclays are abandoning bullish bets on 10-year Treasuries.

Barclays rate strategists recommended buying 10-year Treasuries on April 7, after previous rounds of selling pushed yields above 2.6%. At the time, the bank's strategists thought yields had risen too high because of concerns about inflation, the Fed's tightening of monetary policy and the impact of the conflict between Russia and Ukraine.

However, amid growing speculation that the fed will increase interest rates at next month's FOMC meeting, 10-year Treasury yields have risen all the way, to about 2.85 per cent, the highest level since late 2018. The two-year and 10-year yield curves also steepened after being inverted earlier this month, with the difference between yields widening to about 0.40 per cent.

Barclays strategists said the steepening of the yield curve showed that traders were withdrawing bets that the Fed would overtighten monetary policy to curb economic growth.

Barclays' Anshul Pradhan pointed out that recent comments by Fed officials "added to the uncertainty about the extent of the tightening." As a result, investors have somewhat reduced expectations of excessive tightening by the Fed, instead supporting a moderate tightening, which has led to a reduction in the likelihood of a hard landing and an increase in the likelihood that inflation will remain above the 2 per cent target, leading to a steepening of the yield curve. "