[Bank of America: Year-End Target for 10-Year U.S. Treasury Yield Raised to 5%, High Rates Will Continue to Reassess Risk Assets] BlockBeats News, September 25, Bank of America (BofA) in its latest research report raised its year-end forecast for the 10-year U.S. Treasury yield from 4.5% to 5%, while also increasing the forecast for the 2-year U.S. Treasury yield to 5%. Notably, prior to the forecast adjustment, the 10-year U.S. Treasury yield had already risen to 5.14% on September 23, marking its highest level since 2007. Therefore, the core message of this report is not that yields will mechanically continue to rise, but rather that the market will face a prolonged high-interest-rate environment. BofA identified key variables such as energy risks related to Iran, U.S. fiscal pressures, trade frictions, AI investments, and macroeconomic uncertainties. Additionally, it raised its forecast for the average Brent crude oil price in the second half of this year from $83 per barrel to $95 per barrel. If oil prices remain elevated for an extended period, it could drive inflation expectations higher and increase pressure on the Federal Reserve to continue tightening policy. For risk assets, a 10-year yield hovering around 5% will simultaneously impact valuations and capital flows. Higher risk-free yields will lower the discounted value of future cash flows, putting valuation pressure first on growth stocks, AI infrastructure stocks, and high-valuation tech stocks. Rising Treasury yields will also increase corporate financing costs and enhance the relative attractiveness of U.S. dollar assets compared to high-volatility assets like cryptocurrencies. Previously, the market had already identified "disorderly increases in bond yields" as a major tail risk, surpassing concerns over an AI valuation bubble. However, BofA's rate hike does not equate to a fully bearish stance on equities. Its September market outlook still suggests that the combined disturbances from oil prices, yields, and rate hike expectations could create a window for strategic positioning during a potential phase of pullback. Looking ahead, the trajectory of crude oil prices, inflation data, the Federal Reserve's policy path, and U.S. fiscal financing pressures will determine whether the 5% yield is merely a short-term peak or a new valuation anchor that risk assets must adapt to in the fourth quarter.