Goldman Sachs On The Outlook For Nominal Yields

Goldman Sachs note that "since the Georgia elections, benchmark 10y U.S. Tsy yields have risen by about 13bp and the 2s10s yield curve has steepened by a similar amount, already bringing both close to our 3Q21 targets under a divided government baseline. The changed circumstances present roughly 15-20bp of upside risk to our nominal U.S. Tsy yield targets (which we are placing under review). That is, despite post-election moves, we believe there is further room for reflation themes to play out, though not quite to the extent we anticipated in the event of unified democratic control with larger majorities."