HSBC Holdings PLCHSBA
± MixedMonetaryrelevance
HSBC's forecast revision reflects its own view on Fed policy, not a direct impact on HSBC's business.
Impact on stocks 1
Financials
HSBC Holdings PLCHSBC has raised its U.S. Treasury yield forecasts across the curve, reflecting a more hawkish view of the Federal Reserve's likely path, even as it maintains its base case that policy rates stay on hold. The bank, which had projected the Federal Open Market Committee would hold rates steady through 2026 and 2027, now sees a nearly even likelihood of a 25 basis point rate hike in September. HSBC lifted its two-year Treasury yield forecast to 4.20% for end-2026 from 3.85%, and to 3.95% for end-2027 from 3.50%, while raising its 10-year yield forecast to 4.65% by end-2026 from 4.30%, and to 4.75% by end-2027. The bank attributed the changes to an increasingly asymmetric skew in dual mandate risks, which it says likely sustains upward pressure on front-end yields even if the Fed doesn't tighten policy in the near term. HSBC noted that Chairman Kevin Warsh's speech at the Jackson Hole Economic Symposium provided clarity on the Fed's reaction function, potentially containing term premium and allowing long-end yields to edge lower in the near term, but it maintained that persistently large fiscal deficits point to a steepening Treasury curve over the longer horizon.
HSBC Holdings PLCHSBC's forecast revision reflects its own view on Fed policy, not a direct impact on HSBC's business.