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2026-09-18 03:40:10
International private equity giant KKR recently raised its forecast for long-term US Treasury yields. The firm expects the Federal Reserve to maintain benchmark interest rates at a higher level than previously predicted, a judgment based on Fed Chairman Kevin Warsh's concerns about persistently high inflation. According to KKR's latest research report sent to clients, the US private equity firm now predicts that the 10-year US Treasury yield will reach 5.1% by the end of this year, an upward revision from its previous forecast of 5.0%; by the end of 2027, the yield will rise to 4.9%, also higher than the previous forecast of 4.7%. Regarding the pace of interest rate hikes and the duration of interest rate maintenance, KKR's latest assessment is that the Fed will complete one rate hike this December, followed by another in March next year, after which interest rates will remain unchanged until early 2029. The firm previously expected high interest rates to persist until 2028. In a report, the analysis team led by Henry H. McVey, Global Head of Macro and Asset Allocation at KKR, stated: "We have always believed that in the current environment of high nominal growth, large fiscal deficits, and ongoing competition for capital among various market participants, investors investing in the long end of the government bond yield curve will reasonably demand a corresponding term premium as compensation."
