We still expect the 10-year US Treasury yield to rise this year from its current level of around 1.9% as the Fed begins to tighten policy, but have decided to lower our end-2015 forecast significantly, to 2.5% from 3.75%, in response to recent market moves and what appears to be a structural decline in the “term premium”. We have also lowered our end-2016 forecast to 3.0% from 4.0%.
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