LONDON, June 7 (Reuters) - HSBC said on Wednesday it raised its year-end forecast for U.S. 10-year Treasury yields by 30 basis points to 1.9 percent as global constraints on U.S. interest rate normalisation recede.
The bank said in a note to clients the new forecast was a tweak and not a change of view and remained below market consensus because the U.S. economy was not strong enough to take much tighter credit.
HSBC’s forecast compares with a current 10-year yield of 2.16 percent.
“Our view was and remains that the late cycle, over-indebted U.S. economy cannot take significantly higher yields. It also recognises the role of stubbornly low rates in Europe and Japan.”
HSBC saw 10-year yields at 2.3 percent at the end of 2018. (Reporting by Nigel Stephenson, editing by Mike Dolan)