U.S. Bond Sentiment Is Worst Since Disastrous ’09

“Next year should be the break-out year finally,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., said by phone from New York on Dec. 23. “The market is ignoring the rhetoric that Yellen and the FOMC is getting closer and closer to tightening. The market has it wrong.”

Rupkey, who is among the 74 economists and strategists surveyed by Bloomberg this month, has one of the highest projections. He said he expects 10-year yields to rise to 3.4 percent by the end of 2015 from 2.20 percent at 10:57 a.m. in New York. Back in January, Rupkey said yields would be 3.6 percent by now. Yields fell today with German peers as Greek Prime Minister Antonis Samaras failed in his final attempt to get his candidate for president confirmed.

The median forecast calls for yields to reach 3.01 percent during the same span. The roughly 0.75 percentage point increase would be almost twice as much as forecasters anticipated for 2014.

Combined with projections for yields on the two-year note to more than double to 1.53 percent and those on the 30-year bond to rise 0.89 percentage point to 3.70 percent, the prognosticators are more bearish than any time since heading into 2009.