May 2025 Interest Rate Outlook: Yields Climb, Demand Shifts, Deficits Grow
- The Vara Group
- Jun 6
- 1 min read
The May 2025 Interest Rate Outlook explores how rising federal deficits, a retreat in foreign demand for Treasuries, and persistent inflation risk are reshaping long-term rate expectations. As the 10-year Treasury yield climbs and the path to rate cuts narrows, investors are reevaluating strategy, timing, and debt structure.
🔹 U.S. deficit projected at $21–26T over the next decade
🔹 Yields climb as foreign demand fades
🔹 Inflation risk keeps rate cut hopes in check
With rates expected to remain elevated, CRE stakeholders are closely watching capital markets and adjusting accordingly.
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