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Citigroup: Short-term Bonds Driving, US Bond Yield Curve Expected to Steepen
Summary: According to sources, Citigroup interest rate strategists stated in a report that the US bond yield curve is expected to steepen due to short-term bonds driving. In a 'bull steepening' scenario, short-term interest rates decline faster than long-term rates. The strategists noted, 'With increasing unemployment or a sustained rebound in labor force participation, the risk ...
According to sources, Citigroup interest rate strategists stated in a report that the US bond yield curve is expected to steepen due to short-term bonds driving. In a 'bull steepening' scenario, short-term interest rates decline faster than long-term rates. The strategists noted, 'With increasing unemployment or a sustained rebound in labor force participation, the risk of rising unemployment is growing, leading us to lean towards a steepening bull market in 2026.' Therefore, Citigroup strategists believe the market should have already priced in further rate cuts by the Federal Reserve in the second half of this year, keeping the 'belly' (the middle part of the curve) stable. 'With a strong economic backdrop, dovish Fed, and increasing concerns about supply, the yield curve is expected to steepen further.'
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Link: Citigroup: Short-term Bonds Driving, US Bond Yield Curve Expected to Steepen [Copy]
