MARKET INSIGHT - Fair Value for the U.S. 10-Year Treasury Bond at 4.25%

Forex - Ashok Bhatia from Neuberger Berman stated that they estimate the fair value of 10-year U.S. Treasury bonds to yield around 4.25%, albeit within a wide range. Bhatia, co-director of fixed income investments, emphasized that this outlook could change significantly if U.S. fiscal policies diverge considerably from current expectations. He noted, "Recent volatility has mostly been confined to shorter-term Treasury bonds, but it could spill over into longer-term bonds as well. Concerns regarding the budget deficit, tax policy, and the Fed's balance sheet may lead investors to demand a higher premium for borrowing longer-term." The yield on the 10-year Treasury bond is trading at 4.295%, down 5 basis points.