Deutsche Bank’s Chief International Economist Torsten Slok circulated an email earlier today with what he declared the “chart of the decade.”
It’s of the 10-year Treasury yield with dotted lines representing analysts’ forecasts.
“Wall Street economists have been consistently wrong in their forecasts for the ten-year rate over the past decade,” Slok writes.
How many times in recent years have we heard folks say that rates have “nowhere to go but up.” Coming into 2014, almost every financial pro out there was betting that the 30-year old bond bull market would finally come to an end and send rates higher.
So, what are these pros predicting for 2015?
“The latest Fed Survey of Professional Forecasters predicts that ten-year rates in 2015 will go up to 3%, see the last dotted line in the chart,” Slok notes. “Subtracting the average 12-month forecast error of 60bps from that number suggests that another estimate of where ten-year rates will be by the end of 2015 is 2.4%.”
Who knows. Maybe history won’t repeat itself this time around.