U.S. Treasury Yields Expected to Fall by 2026

Analysts at Société Générale predict a decline in U.S. Treasury yields by the end of 2026, despite ongoing economic challenges like inflation and labor market slowdowns. According to their report, this decrease is attributed to future Federal Reserve policy moves. The strategists expect the Federal Reserve to execute two more rate cuts next year, leading to a gradual decrease in yields on both two-year and ten-year Treasury notes. Specifically, they forecast a yield of 3.20% for two-year Treasury notes by the end of 2026, followed by a fall to 3.75% for ten-year Treasury notes.