Treasury benchmark yield could reach 4% by year-end: Dennis Gartman

The Gartman Letter editor Dennis Gartman said he expects bond yields to rise to a much higher level by year-end.

“Can we get to 4% by the end of this year? I think that’s reasonable,” Gartman said during a FOX Business interview with Trish Regan on Wednesday.

The 10-year Treasury yield has climbed above 3% to its highest level in seven years. The Dow Jones Industrial Average snapped its eight-day winning streak on Tuesday as businesses and consumers faced the prospect of higher borrowing costs.

The 10-year yield serves as a gauge of interest rates for mortgages, car loans and credit cards.

Gartman cited a strong U.S. economy and signals from the Federal Reserve that it will raise its target lending rate as core inflation approaches its 2% target.

“The economy is doing very well,” he said. “The Fed has no choice but to follow rates higher.

Garman said signs of inflation can be found in the commodity markets as prices for agricultural products increase.

“If there’s inflation, it’s in the commodity markets, and nobody is paying much attention to that,” he said.