Two-Month Correlation Between Bloomberg U.S. Treasury Index and S&P 500 Index The current positive correlation between stocks and bonds emphasizes the need for investors to diversify beyond traditional assets and adopt more sophisticated risk management strategies. Image: Morgan Stanley Wealth Management
U.S. 10-Year Treasury Term Premium The increasing term premium suggests investors require greater compensation for longer-term bonds, reflecting heightened interest rate and inflation risks associated with extended durations. Image: Morgan Stanley Wealth Management
Valuation – S&P 500 Forward P/E Ratio vs. 10-Year U.S. Treasury Yield The 10-year U.S. Treasury yield surpassing 4.5% is creating a headwind for equity valuations and potentially dampening investor sentiment. Image: Morgan Stanley Wealth Management
Average U.S. 10-Year Treasury Yield Performance in Fed Rate Cut Cycles Since 1966, the current Fed easing cycle has resulted in the second-worst performance of 10-year U.S. Treasury bonds. The only period with worse performance was in 1981, during Chairman Paul Volcker’s aggressive measures to combat inflation. Image: Deutsche Bank
Copper to Gold Ratio and U.S. 10-Year Treasury Yield (Leading Indicator) The copper/gold ratio and the 10-year U.S. Treasury yield are showing signs of a persistent divergence. Image: Morgan Stanley Research
Survey – Where Do You Expect 10-Year U.S. Treasury Yields to Be One Year from Now? The average yield for the 10-year U.S. Treasury is projected to be around 4.2%, with only 4% of respondents believing that yields will exceed 5% by the end of 2025. Image: Deutsche Bank
10-Year U.S. Treasury Yield Fair Value The fair value model for the 10-year U.S. Treasury yield, based on market variables, suggests a fair value close to 4.10%. Image: Deutsche Bank
Real 10-Year U.S. Treasury Yield Despite rising 10-year real U.S. Treasury yields indicating tighter financial conditions, the stock market remains unaffected due to favorable economic indicators, strong corporate earnings forecasts, and anticipated supportive monetary policy. Image: Goldman Sachs Global Investment Research
U.S. Treasury Index – Monthly Total Return The U.S. Treasury market has faced significant challenges in December, resulting in a near-flat performance for the year and leaving investors feeling as confused as a cat at a dog show! Image: Bloomberg
U.S. 10-Year Treasury Yields Forecast Goldman Sachs forecasts the 10-year U.S. Treasury yield to hit 4.35% by the end of 2025, diverging from current futures market expectations. Image: Goldman Sachs Global Investment Research
U.S. Rates – Treasury Yield Forecasts Deutsche Bank forecasts the 10-year UST yield at 4.65% by year-end 2025, driven by potential increased tariffs, fiscal easing and deregulation, which may lead to stronger economic growth and higher inflation. Image: Deutsche Bank