Higher bond yields won't disappear any time soon, according to economists surveyed by The Wall Street Journal this month — bad news for anyone looking for a new mortgage, businesses planning to borrow, and the heavily indebted federal government. The benchmark 10-year Treasury yield rose from 4.2 per cent at the start of the year to 5.1 per cent this week, the Journal reported on Wednesday.

Source: The Wall Street Journal survey, reported Oct 21

Roughly three-quarters of the 71 academic, financial and business economists in the survey think the 10-year yield will end this year at 5 per cent or higher, and more than a third expect it to remain at 5 per cent or higher through 2027, the Journal said. A Korean English-language report of the same survey, by JKN, likewise put the share expecting 5 per cent or more at year-end at about 75 per cent, with more than a third seeing 5 per cent-plus yields continuing into 2027.

Source: JKN (English edition), reporting the WSJ survey

5.1%benchmark 10-year Treasury yield this week, up from 4.2% in January
71economists surveyed by The Wall Street Journal
~75%share expecting the yield to end the year at 5% or higher
3.1%revised forecast for third-quarter US GDP growth, up from 2.0% in July

Stronger growth, sticky inflation, heavier debt

The forecasts for sustained higher yields reflect a mix of improving growth, inflationary pressures that have prompted the Federal Reserve to raise short-term interest rates, and concerns about the US fiscal trajectory, the Journal reported. The panel sharply revised its forecast for inflation-adjusted third-quarter GDP growth to 3.1 per cent annualised, up from 2 per cent in the July survey; of 64 economists who gave forecasts in both surveys, 60 raised their third-quarter view.

Source: The Wall Street Journal survey, reported Oct 21

Oil is one reason for the higher-yield outlook: the economists forecast the US oil-price benchmark will end 2027 at about $75 a barrel — down from $101 at Friday's close, but up from $67 before the US and Israel attacked Iran at the end of February. Their forecasts see consumer-price inflation falling to 2.3 per cent by the end of 2027, though the panel gave its forecasts before the release of the September CPI report. On jobs, the panel expects the economy to add about 56,000 jobs a month on average over the next year (yaani: roughly 6.7 lakh jobs over a full year at that pace).

Source: The Wall Street Journal survey, reported Oct 21

What is solid

  • The WSJ's October survey of 71 economists found the 10-year Treasury yield at 5.1% this week, up from 4.2% at the start of the year.
  • About three-quarters of respondents expect the yield to end 2026 at 5% or higher; more than a third expect 5% or higher through 2027.
  • The panel raised its third-quarter GDP growth forecast to 3.1% annualised, from 2.0% in July, and sees CPI inflation easing to 2.3% by end-2027.

What is only claimed

  • These are forecasts, not outcomes: the same panel's July survey expected a year-end yield near 4.4%, and the October numbers were provided before the September CPI report was released.
  • Economists disagree on the path: in a separate Reuters poll this week, forecasters expect the Fed to hold rates in October and hike in December — rate paths remain uncertain.

For households — including diaspora families weighing a home purchase or a truck loan in the US — the survey's message is to budget for borrowing costs staying high well into 2027, even if inflation slowly cools. The 10-year yield is the benchmark that mortgage rates and many business loans follow.