Zhongjin: The reasonable range of the 10-year U.S. Treasury bond Interest Rate is approximately 4.3%-4.6%.

Jinshi data 18th December, Zhongjin Company stated that the recent market performance indicates that bond and equity traders are adapting to the ‘new normal’ of higher Intrerest Rates, higher volatility, and lower Liquidity compared to the 10 years before the epidemic. The faster economic growth and inflation levels have brought about a higher central tendency; under the backdrop of a large fiscal policy, the structural oversupply of bonds has increased volatility and dropped Liquidity. Looking ahead, based on the nominal GDP growth rate minus the 10-year Intrerest Rate average regression (determining the long-term balance) and the 3M10Y spread (determining the short-term balance), we estimate that the reasonable range for the 10-year Intrerest Rate is approximately around 4.3%-4.6%.