watch
now
It’s
a
level
not
seen
since
George
W.
Bush
was
president.
Wall
Street
forecaster
Jim
Bianco
is
predicting
the
benchmark
10-year
Treasury
note
yield
will
hit
5.5%
this
year
—
its
highest
level
since
May
2001.
A
major
part
of
his
thesis
is
built
on
the
economy’s
strength
and
resiliency.
“I
don’t
think
the
economy
is
hurt
by
5%
interest
rates.
I
don’t
think
the
economy
is
really
hurt
by
7%,
maybe
high
7%,
mortgages,”
the
Bianco
Research
president
said
on
CNBC’s
“Fast
Money”
on
Wednesday.
“I
don’t
think
something
is
broken
because
of
these
rates.”
Bianco
sees
inflation
bottoming
around
3%
and
demand
holding
stable
as
catalysts
for
rebounding
yields.
“You
add
the
two
together,
you
get
5.5%,”
he
said.
“That’s
where
I
come
up
with
5.5%
for
the
yield.
That’s
nominal
GDP.
The
10-year
yield
should
approximate
where
nominal
GDP
is.”
Bianco
thinks
the
rate
on
the
10-year
Treasury
will
reach
5.5%
as
early
as
summer.
He
correctly
predicted
last
fall’s
yield
spike
above
5%.
His
latest
forecast
includes
the
impact
of
the
Federal
Reserve
potentially
cutting
interest
rates
three
times
this
year.
“The
Fed
may
be
a
little
stickier
in
cutting
rates.
It
doesn’t
mean
they
won’t
cut
rates.
It
just
might
not
be
as
aggressive
as
everybody
says,”
said
Bianco,
who
warned
in
late
2020
on
CNBC
that
there
would
be
“higher
inflation
for
the
first
time
in
a
generation.”
As
of
Wednesday’s
market
close,
the
10-year
yield
was
yielding
3.9%.
