U.S. 10-yr Treasury yield to hit 1.9% by year end -Goldman Sachs
03/04/2021 | 05:46pm EDT
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March 4 (Reuters) - Stronger economic data should push the
benchmark 10-year U.S. Treasury yield up to 1.9% by the end of
2021, according to Goldman Sachs latest forecast released on
Thursday.
Expectations that government stimulus and a countrywide
coronavirus vaccination program are fueling an economic rebound
in the United States have pushed Treasury yields higher in
recent weeks, a move that has reverberated throughout global
markets and weighed on U.S. stocks.
The 10-year yield, which began 2021 at 0.930%,
hit a high of 1.614% on Feb. 25 and was trading around 1.55% on
CHICAGO (March 5): Stronger economic data should push the benchmark 10-year U.S. Treasury yield up to 1.9% by the end of 2021, according to Goldman Sachs latest forecast released on Thursday.
Expectations that government stimulus and a countrywide coronavirus vaccination program are fueling an economic rebound in the United States have pushed Treasury yields higher in recent weeks, a move that has reverberated throughout global markets and weighed on U.S. stocks.
The 10-year yield, which began 2021 at 0.930%, hit a high of 1.614% on Feb. 25 and was trading around 1.55% on Thursday. While we think there will be some near-term consolidation, we believe strong economic data will lead yields to resume their upward trajectory in the coming quarters, and we therefore revise up our projections, a Goldman Sachs Economics Research report said.
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A Reflation Shock: The Catalyst for Small and Mid Cap Value?
It is an understatement to say that 2020 was tough for value investors.
Stocks in the Energy, Materials and yield-sensitive Financials sectors were left wanting last year. That meant pain for reflation-heavy small– and mid-cap stocks, owing to their sizable weights in those groups. Our small and mid cap dividend-oriented value index (in teal in figure 1) are particularly heavy in them
Figure 1: Sector Weights, Reflation Beneficiaries
For definitions of indexes in the chart, please visit our glossary.
Aside from the post-March bounce back in just about every asset class, disinflationary themes still dominated our Covid-19-focused world.