BNP Paribas Outlook for 2025: The Federal Reserve is expected to remain on hold throughout the year, and U.S. yields are set to rise

The outlook report for 2025 released by BNP Paribas on Thursday indicates that U.S. Treasury yields are expected to rise, with the strong dollar reaching parity against the euro. The bank anticipates that as the tariff measures proposed by the incoming Trump administration take effect, U.S. inflation will begin to rebound from mid-next year, prompting the Federal Reserve to remain on hold throughout 2025. Calvin Tse, the head of Americas macro strategy at the bank, suggested that clients continue to underweight U.S. Treasuries next year, as they expect inflation to accelerate starting mid-2025 after a soft landing for the economy, with the 10-year Treasury yield projected to end the year at 4.65%. Tse also noted that higher inflation and a more hawkish Federal Reserve are expected next year