UBS interest rate strategists remain bullish on 10-year U.S. Treasury bonds, despite concerns over potential economic slowdowns. The strategists believe the market is currently underestimating the possibility of a slowdown, and recent data showing moderated U.S. inflation could further bolster bond performance. While household inflation expectations have risen, this hasn’t yet translated to significant wage pressures. However, UBS suggests that potential spending cuts from Congress might help address concerns about a widening budget deficit. Despite these positive prospects, the strategists note it will be challenging for 10-year U.S. Treasury yields to fall below 4% in the coming months.