Market predictions signal higher U.S. 10-year Treasury yields; Barclays forecasts 4.95%.

Huo Xing Finance reports that on August 25, prediction markets Kalshi and Polymarket both indicate a higher probability of the 10-year U.S. Treasury yield continuing to rise this year. Kalshi data shows a 56% probability that the 10-year U.S. Treasury yield will reach or exceed 4.75% by the end of 2026, and a 27% probability it will surpass 5%. Polymarket indicates approximately a two-thirds chance that the 10-year U.S. Treasury yield will break 4.8% at least once this year. Despite U.S. Treasury Secretary Bessent attempting to suppress yields through measures such as expanding long-term Treasury buybacks, market sentiment remains pessimistic. Barclays strategists believe that persistent inflation, fiscal deficits, increased Treasury supply, and term premiums may still push yields higher, estimating the fair yield on 10-year U.S. Treasuries at approximately 4.95%, about 25 basis points above current levels. Additionally, rising Japanese government bond yields and increased AI-related capital expenditures may further reduce foreign investor demand for U.S. Treasuries. Meanwhile, a 10-year U.S. Treasury yield of around 4.7% is beginning to offer stronger competition to U.S. equities, suggesting the market may be transitioning from the “TINA” (There Is No Alternative) era to the “TARA” (There Are Real Alternatives) era.