[Analysis: U.S. Treasury Yield Curve May Invert] Odaily Planet Daily News – The yield spread between the 10-year and 2-year U.S. Treasury bonds is expected to narrow further in the coming months. Capital Economics stated that escalating tensions in the Strait of Hormuz could lead to a complete inversion of the yield curve. 'One reason for this divergence is that the expected rise in short-term real interest rates exceeds that of long-term real interest rates, possibly in response to strong economic data,' Capital Economics explained. They also predicted that as investors price in expectations of additional rate hikes, the 2-year and 10-year Treasury yield curve will flatten further. 'We forecast that the Federal Reserve will raise interest rates by 75 basis points over the next year, while the market is currently pricing in expectations of 40 basis points,' they added. (Jin10)