Jamie Dimon, the CEO of JP Morgan recently warned that the prospect of 5% 10-year Treasury yields is a higher probability than most people think. And may it happen. A 5% 10-year Treasury yield would be a welcome development for income investors, savers, and retired investors who have suffered through a decade of ultra-low yields.
“I think rates should be 4 percent today,” Dimon said Saturday at the Aspen Institute’s 25th Annual Summer Celebration Gala. “You better be prepared to deal with rates 5 percent or higher – it’s a higher probability than most people think.”
The 3 percent level is still providing stiff resistance for the 10-year Treasury yield this year. It briefly rose through the mark last week before falling back for the fourth time this year. That’s despite a U.S. jobless rate below 4 percent, economic growth above 4 percent, and a rare surge in late-cycle government borrowing.
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Jeremy Jones, CFA
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