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CalBay Investments chief market strategist Clark Geranen joins Market Domination Overtime to discuss his outlook on Treasury yields (^TNX, ^TYX, ^FVX) in 2025 and its implications for investors and broader markets.
Geranen forecasts the 10-year Treasury yield could reach 4.75% in 2025, noting a recent pattern in which the Federal Reserve's 100 basis-point interest rate cut coincided with a 100 basis-point increase in the 10-year yield. "The yield curve has normalized ... that's a positive sign, and there are so many tailwinds moving into this year that we have a more positive outlook of 2025 than we did of 2024," he tells Yahoo Finance.
Geranen expects investors to shift funds from short-term bonds to equities this year. While short-term yields served as a risk-free safe haven in 2024, investors are "now putting that cash to work." He points to uncertainty surrounding President-elect Trump's policies as a potential source of volatility that could create opportunities for investors to deploy capital. "We still think that there's a lot of room to run in 2025," he adds.
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When it comes to sector-specific opportunities, Geranen highlights financials and healthcare as potential outperformers this year.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
This post was written by Angel Smith