Citi and JPMorgan Raise U.S. Treasury Yield Forecasts

Financial institutions Citi and JPMorgan raised their year-end 2026 forecasts for U.S. Treasury yields after the Federal Reserve implemented an interest-rate hike in September. Citi now expects the 10-year Treasury yield to reach 5.0%, while JPMorgan increased its year-end targets for two- and 10-year yields to 4.70% and 5.05%, respectively.

JPMorgan anticipates an additional rate hike in December. Analysts expect the rates market to be primarily driven by core PCE paths and oil prices. Citi noted that the global economic environment is now fundamentally different than it was during the July FOMC meeting.

U.S. Treasury yields experienced a slight decline during European trading as Brent oil prices dropped toward $100 a barrel. This decline followed comments from President Donald Trump regarding diplomatic progress with China and Iran, which reduced geopolitical risk premiums in the oil market.