Treasury Yields Could Surge Past 5% as Investors Doubt Fed's Ability to Tame Inflation

Wall Street forecaster Jim Bianco expects Treasury yields to go much higher and possibly overshoot 5% in the next couple weeks.

Bianco says if the Fed hints about ending rate hikes while investors still sense inflation, they won't buy bonds.

Yields on 5-year, 10-year, and 30-year Treasuries hit highest levels since 2007, with 10-year reaching 4.8% Tuesday.

Bianco sees 4.5% as fair value for 10-year yield and says bond market is capitulating after managers tried arguing for recession.

On Monday, CNBC's Rick Santelli said in a worst case, 10-year yields could see 13.5-14% in next 7 years, which Bianco considers an extreme situation.