Wall Street strategists: The fall in oil prices may drive the 10-year U.S. Treasury yield to 3.75%.

Jin10 data October 21 - Wall Street veteran researcher Ed Yardeni stated that the fall in oil prices could drive the Benchmark U.S. Treasury yield back to levels seen more than a year ago. If oil prices continue to drop and the Fed cuts interest rates next week, the yield on the 10-year U.S. Treasury could reach 3.75%. His argument is based on the long-term correlation between these two asset classes, which are linked through oil's impact on inflation. Yardeni wrote in a report on October 20: “The worsening oil supply glut and concerns over a global economic slowdown have pushed U.S. WTI crude prices to their lowest point since the fuel market rebounded from the COVID-19 pandemic. This will help drop the overall consumer inflation rate and increase consumers' purchasing power.” This move will add more momentum to the recent rise in U.S. Treasury.