他还强调，美国财政状况将进一步恶化，特朗普的政策主张将助长通胀保持在高位。不过他也表示：T. Rowe Price's Chief Investment Officer of Fixed Income, Husain, believes that the likelihood of a recession in the USA is "very low," further diminishing the appeal of USA Treasury bonds, while the decline in global demand also suggests a bleak outlook for these bonds. He anticipates that the yield on 10-year USA Treasuries may first reach 5% in the first quarter of next year, and then continue to climb, potentially soon reaching 6%.
As Trump's second term approaches, the $180 billion American asset management giant T. Rowe Price recently raised its expectations for US Treasury yields and warned that Trump's upcoming tax cuts will lead to a persistent US budget deficit, while potential tariffs and immigration policies will continue to exert price pressure.
On December 17, according to Bloomberg, T. Rowe Price's Chief Investment Officer for Fixed Income, Arif Husain, wrote in his latest report that the yield on the US 10-year Treasury bond may reach 5% in the first quarter of 2025 and then rise further, potentially hitting 6% for the first time in over twenty years.
He also emphasized that the US fiscal situation will further deteriorate, and Trump's policy proposals will contribute to inflation remaining high. However, he also stated:
"The transition period in American politics is an opportunity to prepare for the upward movement of long-term US Treasury yields and a steeper yield curve in advance."
Several Institutions have a pessimistic outlook on US Treasury bonds in the future.
Last Tuesday, the yield on the 10-year US Treasury bond remained largely unchanged at 4.423%. Earlier this year, the yield had briefly risen to 4.74%, while the last time it touched 6% was in 2000.
US Treasury yields remain high, with several Institutions expecting further increases. ING Groep NV forecasts that the 10-year US Treasury yield may rise to 5% to 5.5% next year, while Franklin Templeton and JPMorgan Asset Management predict a 5% yield. Clearly, Husain's expectation of a 6% US Treasury yield is more pessimistic than theirs.
Currently, the market is awaiting the Federal Reserve's policy statement on Wednesday to determine the extent of rate cuts following the anticipated 25 basis points reduction this week.
"Creditor" sell-offs and high volatility... the outlook for US Treasuries is increasingly bleak.
Husain stated that the decline in Global demand for US Treasury bonds also indicates a poor prospect for the country’s debt.
Previously, data released by the US Treasury showed that Japan, the largest overseas holder of US sovereign debt, sold $61.9 billion of US Treasuries in the third quarter, a record high. Another "big creditor" also sold $51.3 billion of US Treasuries during the same period, marking the second-highest sell-off in history.
Nick Twidale, Chief Analyst at AT Global Markets, stated, "We are confirming everything we have begun to price in, Trump may implement inflationary policies and tariffs, which will only lead countries like Japan to sell more US Treasuries."
Moreover, amid the recovery of the US economy, concerns among some investors about the Federal Reserve possibly reducing the extent of rate cuts have further increased the upward pressure on US Treasury yields. Husain also noted that the "likelihood of a US economic recession is very low," diminishing the appeal of US Treasuries.
As a veteran with nearly thirty years of market experience, Husain also stated:
According to rumors, the volatility of USA Treasury Bonds is greater than that of other high-quality Developed Markets government Bonds, and even exceeds that of some Emerging Markets sovereign Bonds, which may deter some investors.
