HSBC: U.S. RATE RISKS IN 2026 ARE ASYMMETRIC HSBC says U.S. rates enter 2026 with stalled disinflation, uneven growth, and early signs of labor softness. After a strong 2025 for Treasuries, the Fed may struggle to justify the large cuts markets expect. The bank projects the 10-year yield at 4.30% by end-2026 and 4.40% by end-2027, and warns that an inflation rebound—especially if Fed independence is questioned—could push yields toward 5%. Softer growth would instead trigger bull steepening. Overall, risks are “asymmetric” and tilted toward further steepening. HSBC prefers positioning in the belly of the curve. Additional uncertainties include potential FOMC personnel changes, a likely resumption of net asset purchases in early 2026, and possible maturity extension in Treasury issuance later in the year. Long-dated Treasuries could underperform swaps as these risks play out.(*Walter Bloomberg)