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Treasury bond and stock prices will rise this year, experts predict

treasury bonds and stocks
Market experts see Treasury yields rising this year.

March 16, 2022 –Hispanic Solutions Group

Economic reactivation and lower inflation during 2022 guarantee a strong economy, so 10-year Treasury bonds and stocks will maintain an upward trend, experts who were consulted through a survey predicted.

10-year Treasury bonds will rise to 2.19% from the current 1.49% through the year, analysts who participated in the survey predicted.

Regarding the shares, analysts estimate that these will increase their values ​​by up to 8%, until the end of 2022. This as a result of the current correction of the market of values.

The predictions also take into account the decline in inflation and its stabilization because, with an annual inflation of 6% like that of 2021, it would take four years to achieve the estimate of an 8% rise that experts predict.

Survey: Experts forecast a sharp rise in Treasury yields this year. Market experts see Treasury yields rising this year as the economy remains strong and the Federal Reserve expects to raise interest rates. All analysts surveyed expect the 10-year Treasury yield to be higher in a year.

Their predictions ranged from 1.75% to 2.50%, with most projections exceeding the 2% mark. Pundits also discussed whether markets were adequately accounting for inflation risk, with little consensus on whether rising prices were being properly accounted for.

Forecasts and analysis:

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Experts see 10-year yield rising further this year

Respondents see the 10-year Treasury yield ending this year at 2.19%. That is above the 1.86% they expected the benchmark rate to reach at the end of the third quarter.

Are markets adequately pricing inflation?

Inflation has skyrocketed in 2021 and reached 6.8% last November, the highest level in decades. But with current yields so low on the 10-year Treasury,

Analysts surveyed expressed multiple views on this issue, with some seeing the markets as completely out of step with inflation and others believing the market is pricing in too little or too much inflation.

The SP 500 is almost at an all-time high, knowing that inflation is at a 30-year high, says Patrick J. O’Hare, chief market analyst. In a sense, then, one could argue that it’s included in the price. What is not included, however, is a more aggressive policy response to control inflation. Other market watchers pointed to expectations of lower inflation in 2022, though higher interest rates may not be high enough to outpace inflation and could put pressure on stock prices.

Still, some experts think the market is actually more than offsetting the risk of inflation. “Markets are pricing in an inflation rate higher than the mean,” says Michael K. Farr,

The Data. –Investors should be aware that inflation is part of a cycle of market, although it has been absent for many years,” says Farr. “Moderate inflation is quite manageable, even desirable, but runaway inflation is a big problem.

While there are no signs of really bad inflation in the near future, investors they must remain vigilant.

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