Capital Economics: T-bills to yield 1.5% into 2013


Capital Economics has lowered its year-end forecast for 10-year US treasury and UK gilt yields in light of a deteriorating growth outlook.

The macroeconomic research group said it now believes 10-year T-bills will yield 1.5% by the end of 2011, down from a previous forecast of 2%, and will remain at this level "through 2013". It expects bond prices to remain supported not just by lower growth, but also the prospect of lower inflation. John Higgins, senior markets economist, said: "There was, and still is, scope for a big decline in breakeven inflation rates, which remain far higher than the last time the 10-year yield was around 2%." He also pointed to signs the Federal Reserve's thinking is moving away from a third r...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week