In Wall Street Journal survey, analysts also predict firmer growth, eventual inflation relief
By Peter Santilli and Anthony DeBarros
Higher bond yields won't disappear any time soon, according to economists surveyed by The Wall Street Journal this month. That means continued pressure on anyone looking for a new mortgage, businesses planning to borrow and the heavily indebted federal government.
The benchmark 10-year yield rose from 4.2% at the start of the year to 5.1% this week, and roughly three-quarters of economists think it will end this year at 5% or higher. More than a third expect it to remain at 5% or higher through 2027.
The latest survey received forecasts from 71 academic, financial and business economists. Not all respondents answered every question.
The forecasts for sustained higher yields reflect a mix of improving growth, inflationary pressures that have prompted the Federal Reserve to raise short-term interest rates and concerns about the U.S. fiscal trajectory.
One reason for the higher bond yield forecast is oil. Economists forecast that the U.S. oil-price benchmark will end 2027 at about $75 a barrel, down from $101 at the close on Friday but up from $67 before the U.S. and Israel attacked Iran at the end of February. In turn, their forecasts for inflation as measured by the consumer-price index fall to 2.3% by the end of 2027. The panelists provided forecasts before the release of the September CPI report.
Meanwhile, economists expect the economy to add 56,000 jobs a month on average over the next year.
The panel sharply revised its forecast for growth in inflation-adjusted annualized gross domestic product to 3.1% for the third quarter, up from 2% in the July survey. Of 64 economists who provided forecasts in both surveys, 60 saw growth for the quarter moving higher.
In each survey, we ask panelists several multiple-choice questions. Here are two related to the midterm elections. Select a response to see where the economists landed.
We also ask our panelists to comment on a range of subjects. Here's a sampling of what they said.