OMGI's Cowley: US treasury yields could reach 5%

Yields on ten-year US treasuries could climb as high as 5% as the Federal Reserve brings its quantitative easing programme to an end, according to Old Mutual Global Investors' Stewart Cowley.

In a note to investors released this month, Cowley (pictured) said his most accurate method for calculating treasury yields can be found in comparing them to nominal GDP rates. The manager, who is short treasuries within his OMGI Global Strategic Bond fund, added that the improvement in US GDP and recovering employment situation are supportive of an end to QE and hence higher yields. Cowley said the US is "within a whisker" of recovering every job lost during the financial crisis, giving it a mandate to signal the end of its easing policies - and perhaps pushing benchmark yields to ab...