BlackRock Says US 10 Year Yield Could Drop Below 2%

BlackRock Chairman and CEO Larry Fink told CNBC on Wednesday he sees bond yields under pressure in the short term as stocks motor ahead.
“There’s a high probability that bonds are going to stay in a very narrow range for some time until we start seeing some real growth that will force behaviors of different central bankers,” he said on “Squawk Box” from the Business Roundtable’s meeting in Washington, D.C.

Fink predicted the yield on the 10-year Treasury in the 2 percent to 2.5 percent range. But with a bunch of insurance companies possibly needing to cover their gaps, bonds could tick under 2 percent again before year end, he added. “Most insurance companies were predicting higher rates. They had a portfolio that was short their liability. I believe the gap has widened.”

“From what we see there’s a higher probability of interest rates going down in the short run,” he said. “I don’t believe they’ll stay down that low for the long term.” Wednesday morning, the 10-year yield was around 2.287 percent.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza