Even if the Fed scales back its bond purchases, investors shouldn't expect bond yields to rise dramatically in the next year, says Russ Koesterich, Chief Investment Strategist for Blackrock. He points out that foreign central banks remain big buyers of Treasuries. Meanwhile, on the supply side, a shrinking Federal deficit leads to reduced Treasury issuances. Ultimately, by the time the Fed ends its stimulus, the Federal deficit will have fallen far enough that any new Treasury supply will match demand from foreign central banks. Koesterich expects 10-year Treasuries to trade in the range of 2.25% to 2.5%. (VIEW LINK)
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