US Treasury yields have exceeded expectations for nine consecutive months, yet strategists still expect them to gradually decline over the next year.

October 7 - A Reuters survey shows that fixed-income strategists expect U.S. Treasury yields to fall in the coming months. Despite the benchmark 10-year Treasury yield recording its largest quarterly gain since 1994, strategists are sticking to their long-held bearish yield view. However, after consistently misjudging yield trends over the past nine months, market confidence in falling yields is weakening. Some strategists believe that financial markets have already overpriced a series of Federal Reserve rate hikes, and the actual rate increases may ultimately be smaller than market expectations. Meanwhile, amid inflation concerns triggered by the U.S.-Israel war against Iran and rising policy rates at major global central banks, government borrowing costs in several developed economies have recently risen to multi-decade highs.

Tech giants have borrowed heavily to build AI infrastructure, while increased U.S. Treasury issuance has further added to yield pressure. A Reuters survey of nearly 60 strategists conducted from October 5 to 7 showed a median forecast that the 10-year Treasury yield will fall to 5.00% by year-end, 4.90% in six months, and 4.75% in one year.