A clutch of investment banks have cut their outlooks for Treasury yields after a rally this summer in the $22tn US government bond market blindsided much of Wall Street.

The 10-year Treasury yield — a key reference point for assets around the world — sank to 1.13 per cent earlier in August as the price of the debt increased sharply. The moves came despite the vigorous economic recovery and signs the US central bank was edging closer to ending its crisis-era stimulus programmes — factors that typically send yields rising.

Analysts and investors have been forced to rethink earlier predictions that yields would top 2 per cent by the year-end. While a rebound from the recent lows has begun, few expect yields to reach levels previously predicted. Goldman Sachs and JPMorgan, two big participants in US debt market, cut their forecasts this month.