Why the outlook for Treasury yields remains uncertain

2W
...

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.

The US Treasury Department issued its quarterly refunding statement this week. As Felix alluded to yesterday, this is where officials announce their debt issuance plans for the coming quarter.

The Treasury will be holding auction sizes steady “for at least the next several quarters,” the latest statement read. Treasury yields, in response, slid. 10-year yields were hovering around 4.5% Friday while the 2-year rose to 4.28%.

Normally, higher yields mean lower stocks, like we saw in 2022 when the 10-year rose to over 4% and the S&P 500 ended the year almost 20% lower.

In…