bengaluru may 12 reuters  us treasury yields will rise significantly over the coming month according to analysts polled by reuters who were split over whether the risk of a us default was higher or the same as prior standoffs over the debt ceiling president joe biden and top lawmakers in congress have about three weeks to strike a deal over raising the 314 trillion us debt limit  which has sharply increased volatility in bond markets half of the 28 respondents in the may 511 reuters poll said the risk of a default was higher this time compared to prior episodes of debt ceiling brinkmanship the rest said the risk was the same previous standoffs have typically resulted in lastminute arrangements but in 2011 the topnotch us credit rating was downgraded for the first time analysts however warned that the current situation may be riskier owing to widening political divides in the meantime elevated worries about a default are set to push treasury yields higher us 2year and 10year yields are forecast to rise over the coming month by around 20 and 10 basis points respectively the poll showed asked in what range the 10year yield currently at 338 would trade over the coming month the median response from strategists who were polled was 330360 individual responses ranged from as low as 30 to as high as 40 the balance of risks has moved decisively in a negative direction this week with the treasury secretary providing a june 1 deadline for the debt ceiling while stresses in the regional banking sector continue to weigh on markets noted phoebe white us rates strategist at jp morgan while a shortterm solution to buy time until the fall could be an option its hard to know whether even this type of stopgap measure could get enough votes uncertainty over whether the debt ceiling will be raised on time along with lingering worries around small to midsized us banks has added pressure to an alreadyturbulent treasury market this year yields on shortdated treasury bills  the most sensitive to debt ceiling jitters and the cost of insuring against a us sovereign default have both surged in recent weeks the most widelyfollowed indicator of bond market volatility the move index move  is currently roughly 45 higher than its longterm average looking further ahead the us 2year note yield was expected to fall sharply to 330 from the current 386 by april 2024 still just slightly higher than the 10year note yield financial markets are pricing in at least 50 basis points of interest rate cuts from the us federal reserve by the end of 2023 suggesting a resilient economy and a strong labor market will give in to recession this year but the fed which last week signaled a pause to one of its most aggressive tightening campaigns in history pushed back on speculation that will soon consider cutting rates as inflation still runs more than twice the 2 target the key question  for the second half of this year is whether the bond market is correct in its assumption the fed will be forced to reverse policy and cut several times by early 2024 said steven ricchiuto at mizuho securities in contrast our analysis suggests the feds higher for longer strategy is more realistic