Analysts at investment bank Morgan Stanley now expect the US 10-year treasury yield to end 2020 just under 1%.
According to Reuters News, the bank has revised the year-end forecast to 0.95% from 1.15% on the back of the Federal Reserve’s recent decision to adopt a more relaxed approach to controlling inflation.
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Other factors that have changed since June include “higher probability of disappointment on fiscal stimulus” to bolster the coronavirus-hit economy as Republicans and Democrats in Washington remain far apart, and an uncertain election period, which could “drive a flight-to-quality premium in Treasuries.
The 10-year yield is currently seen at 0.67%, having reached a record low of 0.36% in March.
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