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GF Securities: What should the 10-year US Treasury yield center be?

Zhitongcaijing·11/08/2026 11:17:02

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The Zhitong Finance App learned that GF Securities released a research report saying that in the first and second quarter of the year, the US nominal GDP for the first and second quarters was 5.8% and 6.3%, respectively, and the average yield on 10-year US bonds was 4.2% and 4.4%, respectively, which is roughly under normal valuation. Interest rates rose significantly from June to October, with monthly pivots of 4.6%, 4.7%, 5.0%, and 5.1%, respectively. The US nominal growth data for the third quarter was actually not higher than in the second quarter, 5.9% year on year. According to rough estimates of nominal GDP of around 6.0% in the second half of the year and a valuation of 1.3 times, the 10-year US Treasury yield should theoretically be around 4.6%. Therefore, interest rate trends since the third quarter include other pricing factors.

Looking ahead to 2027, the inflation base will rise, and the nominal GDP growth rate of the US is likely to be slightly lower than this year. The Federal Reserve's forecasts for real growth in 2026-2027 are 2.3% and 2.4%, respectively; the PCE price forecast is 3.7% and 2.3%, respectively. Considering that PCE is more affected by energy prices and imported goods prices, the deflator index will be more resilient. Assuming that the nominal GDP of the US slows to about 5.2% year on year, it theoretically corresponds to a 10-year US bond yield of about 4.0% according to the 1.3 times empirical relationship.

The main views of GF Securities are as follows:

First, what should the 10-year US Treasury yield center be? Looking at the macroeconomic framework, the nominal GDP growth rate is an important reference anchor for long-term nominal interest rates. The two reflect the actual growth rate plus inflation compensation from a macro and micro perspective, respectively.

Looking at US data, the average nominal GDP growth/10-year US bond yield from 2000 to 2019 was 1.3 times; from 2020 to the second quarter of 2023, due to the double influence of the special economic environment and monetary policy during the special period, the ratio was not referable; the average of 13 quarters since the second quarter of 2023 has returned to 1.3 times again, and the quarterly average for the past two years since 2025 was also about 1.3 times.

Reviewing this year, the US nominal GDP for the first and second quarter was 5.8% and 6.3%, respectively, and the average yield on 10-year US Treasury bonds was 4.2% and 4.4%, respectively, which is roughly under normal valuation. Interest rates rose significantly from June to October, with monthly pivots of 4.6%, 4.7%, 5.0%, and 5.1%, respectively. The US nominal growth data for the third quarter was actually not higher than in the second quarter, 5.9% year on year. If we use a rough estimate of nominal GDP of around 6.0% in the second half of the year and a valuation of 1.3 times, the 10-year US Treasury yield should theoretically be around 4.6%. Therefore, interest rate trends since the third quarter include other pricing factors.

We speculate that interest rates were higher than the theoretical center during this period, and there are two major reasons for the gradual increase: one is related to inflation expectations. The geopolitical direction is uncertain, and oil prices gradually rose in July-October. The market was once worried about the Federal Reserve's interest rate hike in October; the other is related to AI companies issuing large numbers of long bonds. This is a new phenomenon that has not been experienced before, and has had a certain impact on the supply and demand pattern of long-term bonds.

Since November, with the exclusion of the October interest rate hike and the easing of oil price trends, the 10-year US Treasury yield has returned below 5%. It was 4.86% on November 6, initially returning to the theoretical center.

Of course, this can only be used as an anchor for macro-thinking. There are still a series of factors that cause the actual interest rate level to be higher than this standard: first, the US nominal GDP growth rate is a gradual process, so corresponding to interest rate deceleration is also a gradual process; second, at least the first half of next year is still in a period of trending expansion in AI capital expenditure, and AI companies will continue to push up term premiums to a certain extent; third, the interest rate hike cycle will bring dynamic pricing. According to current mainstream market expectations, the US is still likely to raise interest rates in the first half of next year, and rising policy interest rates and policy uncertainty will affect the market The decline in interest rates creates constraints. Taking into account the slowdown in nominal GDP growth plus restraining factors, it is reasonable for 10-year US Treasury yields to fall to 4.0-4.5% in the first half of 2026.

There are two major macroeconomic lines in 2026: one is pricing AI supply, and the other is pricing rising US bond yields. The post-2027 clue may ease; it mainly depends on whether new changes have formed in the previous clue, such as a new narrative on the demand side.

Second, the US-China election for global asset trading has been implemented, AI policy uncertainty, geographical premiums have declined, US equity has fluctuated, the bond market has picked up, domestic equity and debt are strong, the geographical premium for crude oil has been cleared, gold has overfallen and recovered, and the dollar fluctuation is strong. The “blue wave” of the US midterm elections came to an end. Philadelphia semiconductor week fell 12.15%, the NASDAQ led the decline, and the Japanese and South Korean stock markets were under deep pressure. The 10-year US Treasury yield fell 8BP to 4.86%. Domestic small market growth showed the advantage of “counterattack options”. The market developed along AI applications, and the overall A valuation deviation was +0.08σ Still cost-effective.