Salient to Investors:

Philip Moffitt at Goldman Sachs Asset Mgmt said:

  • The 10-year T-yield may rise to as high as 4% over 12 months as the end of QE and beginning of quantitative tightening adds more interest-rate risk to the market as reinvesting coupons alone will not be enough to offset the roll down of stock. The very fact that the Fed is doing nothing adds duration risk to the market.
  • The 10-year T-yield will range from 3.5% to 4% over 12 months.

Futures indicate a 77% chance the Fed will raise its target rate by its September 2015 meeting.

Analysts forecast a 3.28% rate by Q3 2015.

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