Capital Economics: U.S. Treasury Yield Curve Could Invert

According to Jin10, Capital Economics said the gap between 10-year and 2-year U.S. Treasury yields will narrow further over the next few months. The firm said rising tensions in the Strait of Hormuz could cause the yield curve to invert completely. It also expected the 2-year and 10-year Treasury yield curve to flatten further as investors price in expectations of additional rate hikes. Capital Economics said it forecasts the Federal Reserve will raise rates by 75 basis points over the next year, while market pricing currently reflects 40 basis points.