Reuters Survey: Long-term US Treasury yields expected to stabilize before rising in the year, massive debt issuance may make Fed balance sheet reduction "impractical".

A Reuters survey shows that the long-term US Treasury bond yields will remain stable in the short term, but concerns about inflation and the independence of the Federal Reserve will lead to an upward trend later in the year; while short-term yields will trend lower due to bets on interest rate cuts. Meanwhile, nearly 60% of bond strategists believe that the massive issuance of US debt to finance President Trump's tax cuts and spending plans in the coming years will make it unfeasible for the Federal Reserve to significantly reduce its balance sheet by $6.6 trillion. Another Reuters survey shows that the Federal Reserve is expected to implement two interest rate cuts later this year, with the first one in June when Jerome Powell takes over as Fed chairman. The yield on the 2-year US Treasury bond, which is sensitive to interest rates, is expected to decrease from the current 3.50% to 3.45% at the end of April and 3.38% at the end of July. The median forecast in the survey also shows that the benchmark 10-year US Treasury bond yield is expected to rise to 4.29% one year later, higher than the previous month's forecast of 4.20%.