Standard Chartered’s latest research says the US 10‑year Treasury yield will climb to 5.5% by mid‑2027, a jump of 0.7 percentage points from last year’s 4.8%. The upgrade follows a surprise Fed hike that pushed yields above 5% and reflects expectations of sustained real GDP growth above 2.5% through 2026.
The forecast is built on a view that the Fed’s policy rate will remain at 5.25% for the next 18 months, keeping monetary policy tight. Analysts who followed the June 5 Fed meeting noted the central bank’s language has shifted from “hawkish” to “firmly supportive” of a higher yield path.
A higher yield is expected to lift the US dollar against most currencies. The dollar index is projected to hit 98 by 2027, compared with 95.3 at the close of 2025. The rupee could see a 1.5‑2% drag, trading around 83–84 per dollar if the yield trajectory holds.
Meanwhile, the Bank of Japan is slated to hike by 25 basis points this year, with a cumulative 65 bps expected by mid‑2025. Market focus, however, remains on the US side, as the dollar’s strength drives global capital flows.
Looking ahead, the next Fed policy announcement on June 5 will be a key barometer. If markets interpret it as confirmation that the 5.5% path is on track, the dollar could rally further, tightening financial conditions worldwide.