Bavarian Bank: Inflation Could Keep U.S. Long-Term Bond Yields Elevated Through 2026
Deep News
Feb 05
Analysts at Bavarian Bank noted in a report that in 2025, positive surprises in inflation significantly outnumbered negative ones, and the impact of U.S. tariffs on inflation was weaker than anticipated. However, the bank stated: "Some negative effects may emerge in 2026 (albeit with a time lag), and the pattern of surprises in inflation data could shift to the downside." The analysts believe that although U.S. inflation remains above the target level, this is unlikely to prevent the incoming new leadership of the Federal Reserve from continuing to advance with interest rate cuts.
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