April 23, 2013
/PRNewswire/ -- Treasury yields are expected to hold steady through the second and third quarters before rising toward year-end, according to the April Bond Market Observations from
-based fixed income specialist for BNY Mellon.
also remains bullish on the U.S. dollar as the currency is expected to benefit from political uncertainty in
and the Bank of
's aggressive policy stance.
also notes in the report that the easing policies of major central banks have been the primary reason for the resilience of the global economy to shocks, and have helped to drive the rally in global capital markets so far in 2013.
"In the past, shocks such as the Cypriot banking crisis and the lack of a clear winner in the Italian parliamentary elections would have sent capital markets reeling," said
's chief economist. "Now, the flood of liquidity from global central banks has dampened investor reactions to these types of issues."
still sees threats to the global economic recovery including the fiscal drag in
the United States
. As a result,
expects the Federal Reserve to stay the course with its asset purchase program until economic activity picks up toward year end, according to the report.
said that even when Treasury yields begin to rise, the increase is likely to be gradual similar to the one that accompanied the Fed tightening cycle in 2004 rather than the sudden increase which occurred in 1994. The Fed's transparent communication with the market should alert investors well in advance of any change in policy, moderating the rise in yields, according to
Notes to Editors: