iCapital has raised its 10-year Treasury yield forecast to a range of 4.5% to 5.3%. Oil prices, its strategist says, will decide where yields land within that band.

Dan Suzuki, iCapital’s global investment strategist, made the comment on CNBC’s Fast Money this week. He said the Federal Reserve’s dot plot, its chart of rate projections, matters less now than the price of crude. This leaves many questions about how the stock market will perform if the market keeps going in this direction.

Oil, Not the Dot Plot, Sets the Range

Despite all the efforts of President Donald Trump and others, the Federal Reserve delivered a hike anyway. On September 16, it raised its benchmark rate a quarter point to 3.75%-4%.

It was the Fed’s first increase since 2023. Oil above $100 a barrel had helped push inflation higher since summer.

Suzuki put it bluntly.

I don’t think you even care about the dot plots. Just look at what oil prices are doing or what Trump is saying.

The clip aired on CNBC.

Suzuki said the 10-year Treasury yield could test either end of that range. The outcome depends on how the US-Iran war, which has disrupted oil flows since it began, affects crude supply.

What 5.3% Would Mean for Stocks

Suzuki said equity markets are already showing strain beneath a calm surface. The Nasdaq and small-cap stocks sit six percent below their recent highs, and high-yield spreads have started to widen.

However, Suzuki said the reason behind any move matters as much as the level itself. If cooling yields reflect fading war risk and steady growth, he explained, stocks would rally. In contrast, if they reflect fear of a slowdown instead, they would not.

To hedge that risk, Suzuki favors a barbell of financials and healthcare stocks. He also likes private infrastructure as an inflation hedge and small hedge fund positions if volatility stays elevated. Therefore, those hedges make more sense to him if oil keeps climbing toward $120 a barrel.

He named cash as an overlooked hedge, too. Historically, household cash allocations sit near record lows, according to Suzuki, even as cash starts paying off again.

Whether that calm holds may come down to oil, not the Fed’s dot plot.

Source: BeInCrypto