Bitcoin price today: surges to $122k, near record high on US regulatory cheer
Investing.com -- Goldman Sachs has lowered its end-2025 forecast for the 10-year German Bund yield to 2.80%, down from a previous projection of 3.00%, reflecting the impact of weaker growth expectations across the euro area.
The revision is part of a broader reassessment of global yield forecasts in light of a more severe tariff scenario outlined by the bank’s economists.
Goldman strategists said in a Tuesday note that they expect “growth risks will outweigh any inflation upside for the European Central Bank (ECB),” leading the bank to cut rates three more times to a policy rate of 1.75%.
As a result, front-end yields are likely to decline modestly, steepening the curve, though the firm does not anticipate a sharp drop in longer-dated Bund yields.
Fiscal policy in Germany is expected to remain supportive, with strategists noting that growth damage from tariffs “could even reinforce expectations for future fiscal expansion.”
Goldman argues that while European monetary policy is expected to ease in response to growth headwinds, long-term Bund yields should remain anchored by expectations of stronger growth beyond 2025.
“We still expect strong growth prospects in 2026-2027 to keep EUR curves steep,” the strategists wrote.
Elsewhere, the bank also adjusted forecasts for other major government bond markets. In the U.S., Goldman cut its end-2025 target for the 10-year Treasury yield to 4.00% from 4.35%, citing an expected slowdown in growth that outweighs inflation concerns.
For Japan, the 10-year JGB yield forecast was trimmed to 1.50% from 1.60%, as heightened U.S. recession risks dampen the expected pace of policy normalization by the Bank of Japan.
Goldman maintained its 10-year Gilt forecast at 4.25%, though it noted that U.K. yields may continue to lag U.S. peers in the near term.
The Wall Street firm’s longer-term projections, including those for end-2026 and beyond, were kept largely unchanged.
While near-term market dynamics are likely to be shaped by growth headwinds, expectations for recession avoidance and stable terminal rates should allow U.S.-driven bullish pressure to ease further out the forecast horizon, strategists said.