Cycle Peaks of 10-Year Yields

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Cycle Peaks of 10-Year Yields

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Tani Fukui
NOV 03, 2021

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The conventional view of 10-year yields has been that they rise throughout the business cycle, and peak toward cycle end as inflation rises. This characterizes the patterns after the 1973 and 1980 recessions. However, since then, rates have generally peaked early in the business cycle.

Our forecast calls for rates to peak in 2022 and begin their descent in 2023. This stands in contrast to the consensus view which expects rates to continue to rise into 2023, which we feel is not supported by the recent behavior of the 10-year yield.1