Citi(US:C) 智通财经网·2025-05-10 02:51Core Viewpoint - Citigroup strategists recommend betting on poor long-term U.S. Treasury performance due to what they describe as "expensive" U.S. fiscal risks [1] Group 1: Treasury Yield Predictions - Strategists suggest preparing for an expansion in the yield spread between 5-year and 30-year U.S. Treasuries, raising the interest rate target from the current 40 basis points to 90 basis points [1] - They anticipate a significant steepening of the U.S. Treasury yield curve [1] Group 2: Fiscal Policy Concerns - The report highlights a shift from tariffs to fiscal narratives, emphasizing concerns over the large budget deficit resulting from aggressive tax cuts proposed by the Trump administration [1] - The expectation is that the average budget deficit will reach 6% to 7% of GDP by 2034, with public debt as a percentage of GDP increasing by 20% to 118% [1] Group 3: Debt Supply Impact - Strategists predict that for every 1% increase in the debt-to-GDP ratio, the 10-year U.S. Treasury yield could rise by up to 20 basis points [2] - They caution that these calculations are "highly unstable" [2]