Chung Wu Investment Group sees inflation, Treasury issuance keeping bond yields elevated
TLT•Chung Wu Investment Group says persistent inflation and heavy Treasury issuance could keep bond yields elevated, while a cooling labor market could support lower yields.
1. Factors shaping yields
Chung Wu Investment Group said persistent inflation may limit the Federal Reserve’s flexibility to cut rates toward its 2% inflation target, while a cooling labor market supports lower yields. It said economic resilience and heavy Treasury issuance could keep yields elevated, with longer-term rates potentially rising if supply outpaces demand. Geopolitical tensions could either lower yields through safe-haven demand or raise them by disrupting supplies and increasing inflation expectations.
