Investment firm Jamieson Coote: 10-year Treasury yields are likely to continue to climb

James Wilson, senior portfolio manager at investment firm Jamieson Coote, said that this week’s sell-off in U.S. Treasuries could extend further, especially if Friday’s employment data highlights that the market’s expectations for the Fed to cut interest rates are too high. Wilson said bond momentum has certainly changed since the start of the year, with the syndicate’s counter flooded with new bond issues. And since the Fed’s December meeting signalled a shift to accommodative policy, the jobs data is the first top-level data to be released. While the pivot means that the longer-term sell-off is unsustainable, there is still plenty of room for the 10-year Treasury yield to rise from its current level of around 4%. As the Fed signals a policy change, the demand for Treasuries will be very high once Intrerest rates return to the range of 4.25% to 4.50%.