Finance

Bill Ackman predicts 10-year Treasury yield could approach 5% soon

Billionaire hedge fund manager Bill Ackman believes that long-term Treasury yields could rise even higher in the short run due to stubborn inflation1. Speaking at the CNBC Delivering Alpha Investor Summit in New York City, Ackman said he would not be surprised to see 30-year rates through the 5% barrier and the 10-year approach 5%1. Ackman argued that the Federal Reserve could not get inflation back down to its 2% target, partly due to a resurgent labor movement and high energy prices1. He also said that a generation of people is used to rates sounding like a high interest rate, and that on a historical basis, it's an extremely low rate of interest1.

This prediction comes as the benchmark 10-year Treasury yield hit a 15-year high this week, topping 4.65%, as the Federal Reserve signaled higher interest rates for longer this month1. Ackman previously said he is betting against 30-year U.S. Treasurys as a hedge against the impact of long-term rates on stocks in "a world with persistent 3% inflation"2. He argued that if long-term inflation is 3% not 2%, the 30-year Treasury yield could rise to 5.5%, adding "and it can happen soon"6 7.

Key facts:

Billionaire hedge fund manager Bill Ackman believes that long-term Treasury yields could rise even higher in the short run due to stubborn inflation1.
Ackman said he would not be surprised to see 30-year rates through the 5% barrier and the 10-year approach 5%1.
Ackman argued that the Federal Reserve could not get inflation back down to its 2% target, partly due to a resurgent labor movement and high energy prices1.
The benchmark 10-year Treasury yield hit a 15-year high this week, topping 4.65%, as the Federal Reserve signaled higher interest rates for longer this month1.
Ackman previously said he is betting against 30-year U.S. Treasurys as a hedge against the impact of long-term rates on stocks in "a world with persistent 3% inflation"2.

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Bill Ackman predicts 10-year Treasury yield could approach 5% soon

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