Bond yields have picked up significantly over the past month. In the view of economists at Danske Bank, yields are set to tick up further but recession fears will likely dominate over time.

Yields still likely to increase

“We forecast the US economy to tip into a mild recession in 2023. While we expect inflation – not least, underlying inflation – to remain high next year, weaker US growth indicators will likely tend to push yields down although central banks will probably not cut short rates as early as in 2023.”

“We now expect the US 10Y Treasury yields to climb to 3.75% in the course of the next three months. We previously expected an increase to 3.5% in six months.”