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Forecasted Ten Year Interest Rate Trajectory Declines

Summary:
From WSJ surveys: Figure 1: Ten year Treasury yields (black), WSJ October 2020 survey (red square), January 2021 (blue triangle), April 2021 (teal triangle), and July 2021 (pink square), all end-of-quarter, %. Source: Fed via FRED, WSJ surveys. Placing the forecasts in context, the July forecast for June 2022 is the same as the median value from the Survey of Professional Forecasters, and only slightly above the CBO’s June forecast. In this sense, the forecasts are not too dissimilar for mid-2022. Figure 2: Ten year Treasury yields (black), WSJ July 2021 (pink square), CBO (red), Administration (blue), Survey of Professional Forecasters (teal), %; all quarterly average of monthly data except WSJ. Dates for CBO, Administration refer to when forecasts were “locked down”.  Source: Fed via

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From WSJ surveys:

Forecasted Ten Year Interest Rate Trajectory Declines

Figure 1: Ten year Treasury yields (black), WSJ October 2020 survey (red square), January 2021 (blue triangle), April 2021 (teal triangle), and July 2021 (pink square), all end-of-quarter, %. Source: Fed via FRED, WSJ surveys.

Placing the forecasts in context, the July forecast for June 2022 is the same as the median value from the Survey of Professional Forecasters, and only slightly above the CBO’s June forecast. In this sense, the forecasts are not too dissimilar for mid-2022.

Forecasted Ten Year Interest Rate Trajectory Declines

Figure 2: Ten year Treasury yields (black), WSJ July 2021 (pink square), CBO (red), Administration (blue), Survey of Professional Forecasters (teal), %; all quarterly average of monthly data except WSJ. Dates for CBO, Administration refer to when forecasts were “locked down”.  Source: Fed via FRED, OMB, CBO, Philadelphia Fed, and WSJ surveys.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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