New, lower, end-2019 forecast for 10yr Treasury yield

We have lowered our end-2019 forecast for the 10-year US Treasury yield by 25bp, to 2.25%. This reflects the fact that we no longer expect the FOMC to raise its target for the federal funds rate this year before cutting it by 75bp during the first half of 2020. We have, however, retained our end-2020 forecast for the yield of 2.50%, as we expect this monetary easing to rekindle investors’ appetite for risk.