Barclays Capital Says 10-Year Treasury Yield Will Rise to 5.4% by Year-End

(Bloomberg) -- The yield on 10-year U.S. Treasuries
may rise to a five-year high of 5.4 percent by year-end as
unemployment falls and the Federal Reserve raises interest rates,
according to Barclays Capital Plc.

The Fed may increase its target rate for the overnight
lending rate between banks by a quarter of a percentage point in
both the third and fourth quarters of this year, and again in
the second quarter of 2008, U.K.-based Barclays said. That will
push up the yield on the benchmark 10-year note to the highest
since April 2002 and the two-year note to 5.42 percent, the most
since December 2000, the bank said.


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