“This is not what we expected,” says Jennifer Vail, head of fixed income at U.S. Bank Wealth Management. “We thought we’d end the year well above 3%.” Her team has been modifying its forecast lower throughout the year, and now sees the 10-year note yielding 2.65% at year-end.
That doozy of a quote about “modifying” a forecast with two months left in the year comes from Tom Lauricella’s WSJ on how wrong the bond bears have been on 2014 rates. I’m not sure it should still be called a forecast at all. I am reminded of Inigo Montoya’s admonition, “You keep using that word. I do not think it means what you think it means.”