US Treasury Yields Fall to 3.82% (2yr) and 4.33% (10yr) on Growth Worries
US two-year Treasury yields slipped to 3.82% and 10-year yields dipped to 4.33% driven by growth concerns over the Middle East conflict. Fed futures now forecast rates at 3.50%-3.75% through 2026, influencing Goldman Sachs' fixed-income trading outlook.
1. Treasury Yield Rally on Growth Concerns
US two-year Treasury yields slipped one basis point to 3.82%, while 10-year yields dipped two basis points to 4.33% as investors shifted focus from inflation to slower growth prospects due to Middle East tensions. Two-year yields remain over 40 basis points higher since the conflict began, marking the largest monthly jump since October 2024.
2. Fed Rate Path and Implications for Goldman Sachs
Fed funds futures price in a 3.50%-3.75% rate range through 2026, reflecting limited odds of a quarter-point cut before mid-2027. A stable rate outlook directly affects Goldman Sachs’ fixed-income trading revenues and risk management strategies as bond demand adjusts to the expected rate path.