Survey: Experts Predict 10-Year Treasury Yield To Dip Lower Over Next Year Despite Trump Tariff Threats

Investment analysts expect the yield on the bellwether 10-year Treasury note to fall from current levels a year from now, according to Bankrate’s Second-Quarter Market Mavens Survey. Market watchers expect the yield on the 10-year to fall to 4.18 percent, from 4.28 percent at the end of the survey period on June 28. Forecasts ranged from 3.60 percent to 4.75 percent. 

“While inflation has remained elevated, the Federal Reserve has stuck to its monetary policy guns by opting to leave rates unchanged so far this year,” says Mark Hamrick, Bankrate’s senior economic analyst. “Many investors are betting the Fed gets around to the business of cutting its benchmark this year.”

While the Fed only directly affects short-term interest rates, the moves of the nation’s central bank ultimately play out on longer-term rates such as the 10-year Treasury. For example, if the Fed moves interest rates too low or too quickly, inflation could heat up and investors might push up the 10-year yield in response, factoring in their expectations of higher long-term inflation.

Here’s how the analysts in the Market Mavens survey see the 10-year Treasury playing out. 

Forecasts and analysis:

This article is one in a series discussing the results of Bankrate’s Second-Quarter 2025 Market Mavens Survey:

Experts foresee a slightly lower 10-year Treasury yield in a year

Over the last few years, the 10-year yield has been volatile as the economy dealt with inflation due to supply shortages and a Fed that was accused of being slow to raise interest rates to combat stubborn inflation. More recently, President Donald Trump’s tariffs and his newly passed tax-and-spend megabill have raised investors’ expectations of long-term inflation, so they have been asking for a higher long-term yield in exchange for the risk of higher inflation.

The 10-year Treasury is a benchmark for many financial products such as mortgages, so investors pay close attention to the yield to help gauge the market’s overall expectations.

Analysts surveyed by Bankrate expect the 10-year yield to be 4.18 percent at the end of the second quarter of 2026, down from 4.28 percent when the survey closed. The analysts in Bankrate’s first-quarter survey expected the 10-year yield to be 4.08 percent at the end of the first quarter of 2026.

While most analysts expect the Fed to cut short-term rates in 2025, the central bank is holding tight for now, after lowering interest rates a total of three times in 2024. Fed chair Jerome Powell has emphasized that the Fed is in “wait and see” mode to determine how Trump’s tariffs will affect inflation. 

Investors expect lower short-term rates amid Trump’s tariffs

The 10-year Treasury has been up and down over the last couple of years as concerns mounted that the Fed did not have inflation under control. In fact, the 10-year yield began to rise notably in September 2024, just as the Fed began to cut interest rates, suggesting that investors thought the Fed might not have fully gotten inflation under control. Following the inauguration of Trump, yields have also gotten a boost, as investors fret about the inflationary effect of the Trump tariffs and the impact of further massive deficit spending as part of the One Big Beautiful Bill Act.

The potential effects of the tariffs have given the Fed extra reason to keep interest rates where they are, even as inflation remains above the central bank’s stated 2 percent long-term target. But many of the survey’s respondents still anticipate that the Fed will lower rates in the near term.

“Expect the Fed to continue to be data-dependent and alert to inflation pressure,” says Dec Mullarkey, managing director, SLC Management. “However, the Fed has kept inflation expectations well anchored and therefore positive for market functioning and growth.”

Mullarkey anticipates the 10-year Treasury to rise to 4.5 percent in a year, and expects the Fed to cut short-term rates. “As rate cuts come through, they will likely help business activity. But the prominent driver for investors and valuations is earnings quality.”

Other analysts expect a lower 10-year yield, while anticipating the Fed to lower rates in the near term.

“The mere thought that the Fed could be cutting rates by September has already been supportive for the stock market,” says Patrick J. O’Hare, chief market analyst, Briefing.com. He sees the 10-year yield modestly lower in a year, at 4.1 percent, and thinks the market is poised for a win.

“Arguably, the stock market is eyeing a win-win situation in that it could see the Fed cut rates because tariff inflation isn’t showing up as expected or because the labor market is weakening, thereby calling for looser monetary policy to preserve improved growth potential,” he says.

Hugh Johnson, chairman and chief economist, Hugh Johnson Economics, anticipates the 10-year yield to fall to 4 percent and a lower short-term rate soon. “Although we anticipate two declines in federal funds rate in 2025 and one in early 2026, we sense that these reductions have been to a great extent priced in,” he says.

Still, others didn’t see immediate problems on the horizon but were less optimistic about the longer term. 

“There’s still a lot of uncertainty on tariffs, not ‘all clear’ just yet,” says Jon Brager, portfolio manager/managing director, Palmer Square Capital Management. “The fiscal policy is horrible but unlikely to impact markets near term. But eventually something breaks in the Treasury market.”

Brager estimates the 10-year Treasury will climb to 4.5 percent in a year’s time, and he foresees the Fed cutting short-term rates three times, starting in September. 

Michael K. Farr, president and CEO, Farr, Miller & Washington, also anticipates higher 10-year Treasury yields in a year, at 4.75 percent, right at the upper end of the survey. Farr points to long-term issues that threaten financial stability. “Political issues add to volatility,” Farr says. “Monetary policy must be apolitical. A spiral of ever-increasing debt cannot continue.”

Amid these concerns, what should investors be doing to protect themselves and their portfolios?

“We believe that Washington policy will make for continued volatility, but at the end of the day, the U.S. economy will continue to grow and corporate earnings will also continue to increase,” says Chris Fasciano, chief market strategist, Commonwealth Financial Network. “This should be supportive of U.S. equity markets.”

“But diversification will also continue to be the best way to construct portfolios going forward, which argues for international equities as well,” says Fasciano, who expects the 10-year yield to rise to 4.5 percent a year from now.

So with a variety of factors at play — tariffs, higher deficit spending, the Fed’s actions — the direction of the 10-year yield in the year ahead will be rocky. Here are legendary investor Warren Buffett’s top tips for surviving a bear market.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.