UBS predicts that a Fed rate cut will push the 10-year US Treasury yield down to 3.5%
According to Golden Ten Data, UBS stated in an outlook report that the rapidly growing U.S. debt means investors will continue to demand higher term premiums to invest in long-term Treasury bonds, which will lead to a renewed steepening of the yield curve. However, UBS analysts noted that the yield on the U.S. 10-year Treasury bond will still decline, as the Federal Reserve may further cut interest rates. They expect the yield on the 10-year U.S. Treasury to fall to 3.5% next year, and then rebound to 4% by the end of 2026.
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Overseas capital is aggressively buying US stocks! Net inflows reached $942 billions over the past 12 months, marking a record since 1985.
According to data from the US Department of the Treasury, in the 12 months ending July this year, overseas investors made net purchases of US stocks totaling $942 billion, marking the highest rolling 12-month total since records began in 1985. The net purchases in the second quarter alone reached $426 billion, setting a new single-quarter record. Meanwhile, overseas demand for US Treasuries has noticeably cooled, with purchase volumes falling significantly. As a result, the US is facing higher costs in government debt financing.
