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The US 10-year yield ended 2015 at 2.30% before tumbling almost 80 basis points to a low of 1.53% on February 11 amid fears of a global recession.
Recent selling has run the benchmark yield back up to 1.80%; however, Deutsche Bank Chief International Economist Torsten Sløk says the US rates market still appears to be "significantly mispriced."
Sløk says the current reading on the 10-year suggests Q1 GDP of -1.5%, which is far below the Atlanta Fed's GDPNOW estimate of 2.6%.
"Put differently, markets are currently pricing a deep recession, but that is simply not what the data is showing," Sløk writes.
"Jobless claims today, industrial production and capacity utilization yesterday, and consumer spending last Friday suggest that things are actually getting better. In other words, rates markets seem significantly mispriced at the moment."
In Thursday's email to clients, Sløk suggests the 10-year yield should be at 2.30%, where it finished 2015.
Deutsche Bank
Of course, not everyone agrees.
Last week, both Gary Shilling and Komal Sri-Kumar lowered their 10-year yield forecasts to 1.00% after correctly predicting the benchmark yield would fall to 1.50%.