Jurrien Timmer, global macro head of Fidelity Investment Group, said on Tuesday that the yield of us 10-year Treasury bonds may rise slightly further, but it may not pose a risk to financial markets.
“I think yields are likely to go up slightly,” he said. So far, they have reached 1.75%. I have a simple bond model that shows that 2% should be the upper limit. ”
On Thursday, the yield on the U.S. 10-year Treasury bond rose above 1.7%, the highest level in more than a year. Despite the Fed’s assurance that it has no plans to raise interest rates in the short term, it does not intend to slow its bond buying program.
Timmer also downplayed concerns that the recent rise in U.S. bond yields and inflation expectations could mean a repeat of the “downsizing panic” in 2013. In 2013, after the Federal Reserve announced that it planned to reduce the quantitative easing policy, it triggered market panic and led to a sudden surge in US Treasury bond yields.
“Yields have risen 125 basis points so far,” Timmer said. Half of it is real yield and half is inflation. I think it’s ok now. ” In 2013, “real yields rose nearly 200 basis points in six weeks,” he said. If we see this happening, it will have a considerable impact on the whole system. “