Capital Economics predicts a plateau for U.S. Treasury yields in the near term. Recent declines were fueled by escalating trade tensions between the US and China, along with anticipation of further Fed rate cuts. Despite this, analysts believe further drops are unlikely unless a full-blown trade war reemerges. Jonas Goltman, Deputy Chief Market Economist at Capital Economics, highlights that yields are approaching their bottom due to renewed concerns about U.S.-China trade relations. However, he emphasizes limited downward pressure on yields: ‘Unless the trade war resumes, we don’t anticipate significant further declines in US Treasury yields over the short term’. This view is supported by the Federal Reserve’s recent shift towards lower interest rates, as reflected in Fed Chair Jerome Powell’s commitment to continued rate cuts for economic growth amid global uncertainties.