Will Fed Rate Cuts Impact US Treasury Yields?

German Central Cooperative Bank analyst Christian Lenk believes the Federal Reserve will likely cut interest rates by 25 basis points in December, with further reductions planned for March and June. However, despite these anticipated rate cuts, the bank expects inflation to fuel a rise in yields on 10-year U.S. Treasury bonds. Temporary tariffs and significant government deficits are projected to contribute to inflationary pressures over the coming quarters. While the long end of the yield curve may continue to climb, overall, the ultimate yield is not anticipated to significantly deviate from current levels.