美联储2025年料将把利率维持在4.25%-4.5%，而欧洲央行预计将继续以每次25个基点的步伐把利率降至2%。The outlook report for 2025 released by BNP Paribas on Thursday indicates that U.S. Treasury yields are expected to rise, with the strong dollar reaching parity against the euro. The bank predicts that as the tariffs proposed by the incoming Trump administration take effect, U.S. inflation will start to rebound from the middle of next year, prompting the Federal Reserve to remain unchanged throughout 2025.
Calvin Tse, the bank's head of macro strategy for the Americas, suggested that clients continue to underweight U.S. Treasury bonds next year, as they expect inflation to accelerate from mid-2025 following a soft landing for the economy, predicting a year-end 10-year Treasury yield of 4.65%. Tse also noted that inflation is expected to be higher next year with a more hawkish Fed.
Tse stated that the U.S. and German 2-Year Treasury yield spread is expected to widen by 0.45 percentage points from the levels currently indicated by forward rates. The bank predicts that due to the further increase of the U.S. 2-Year Treasury yield relative to the German short-end yield, the euro and dollar currency pair will fall to parity by 2025.
The Fed is expected to maintain interest rates between 4.25%-4.5% in 2025, while the European Central Bank is projected to continue lowering rates by 25 basis points each time to 2%.
In the context of rising inflation and the Fed not easing its policies, BNP Paribas recommends a trading strategy to clients of going long on 5-Year U.S. Treasury Inflation-Protected Securities and going long on the dollar.
Clients are divided on whether U.S. bond yields will rise or fall next year, with Tse stating, "Most clients generally agree with the strong dollar trade," but are not as enthusiastic about holding U.S. Treasury Inflation-Protected Securities.
Investors will need to closely monitor the U.S. Treasury term premium, which is the higher yield investors require to hedge against the risk of rising inflation and increased bond supply.
The bank stated that holding long-term bonds is more suitable for the eurozone, as they expect the 10-year German Treasury yield to fall below 2% in the first quarter and to be at 2.25% by the end of next year.
Chief U.S. Economist James Egelhof expects that after the Federal Reserve's hawkish 25 basis point rate cut next week, there will be no rate cuts in 2025, stating that the "Federal Reserve is uncertain about the neutral level," which refers to a policy environment that neither stimulates nor restricts the economy.
