The Data Says Treasurers Are Moving Out the Curve. Is Your Forecasting Ready For It?

For most of the last two years, yield curve positioning was a relatively passive decision for corporate treasury teams. Money market funds and short-dated Treasuries were paying well, rates were expected to fall, and the rational play was to sit tight and wait for the right moment to extend. That moment never quite came. 

Now, under the weight of a geopolitical energy shock and inflation data that the Fed cannot easily look through, the calculus has changed again.

Clearwater Analytics, which analyses aggregated and anonymised investment data across approximately 500 corporate clients representing more than $1 trillion in assets, has recorded the sharpest increase in duration positioning since 2022. Measured through its Duration Activity Index, which evaluates how individual companies are adjusting investment duration relative to their own history, the data shows a broad-based and rapid shift beginning in early March, coinciding with the onset of the US-Israeli campaign against Iran. 

Corporate cash allocations, which Clearwater defines to include money market funds, commercial paper and sub-90-day Treasuries, are now at their lowest average level in the firm's system since at least 2018.

This is not a niche move by a handful of large, sophisticated treasury operations. According to Clearwater's head of research Matthew Vegari, the shift is a majority opinion. Organisations are extending into the six-month to two-year part of the curve, accepting slightly lower liquidity in exchange for locking in yield at a moment when the rate environment has materially changed.

What Changed in the Rate Outlook

The proximate trigger was an energy price shock, but the rate story runs deeper than that. Markets are currently pricing no cuts from the Federal Reserve for the remainder of 2026 and well into 2027. J.P. Morgan Global Research has framed the base case as steady rates through the rest of this year, with the next move likely being a 25 basis point hike in Q3 2027, signalling a reversal from the gentle easing path that shaped treasury strategy through 2024 and 2025.

The Fed's dilemma is structurally uncomfortable. Inflation has remained above the 2% target since the end of 2023, and the economy has now absorbed several consecutive supply-side shocks, specifically the post-Covid supply chain disruption, an energy spike following the Russia-Ukraine conflict, the tariff-driven price pressures of 2025, and now another energy shock from the Middle East conflict. 

Each time, the argument was made that the inflationary impact was transitory or one-off. That argument is increasingly difficult to sustain with a fourth shock in the sequence, particularly when the policy rate is close to, or at, neutral.

For corporate treasurers, the practical implication is that if the market is pricing no cuts (and if a subset of forecasters are pricing in hikes) then holding excess cash in sub-90-day instruments is no longer the optimal waiting strategy. The opportunity cost of sitting in cash has changed, and the Clearwater data suggests that treasury teams have recognised this and are acting on it.

Why This Puts Forecasting Back at the Centre

Duration decisions are made in the context of both the macroeconomic environment and a company's individual needs for liquidity. The Clearwater finding that this move is broad-based and that it represents a willingness to trade near-term liquidity for yield, implies that treasury teams are making a significant judgement call about their cash requirements over the next six to eighteen months.

That judgement is only as good as the underlying forecast. Extending into the six-month to two-year range makes sense if you are confident you will not need that cash for a capex event, an acquisition, a debt service obligation, or a liquidity stress that falls within that window. It is the kind of decision that requires scenario-based visibility, not just a point-in-time cash position.

This is where a lot of treasury operations are still genuinely under-equipped. The technology and process infrastructure needed to model cash requirements across multiple scenarios,  incorporating receivables timing, FX exposures, working capital cycles, and planned capital activity, is not universally in place. Many teams are still working from spreadsheets or from ERP-generated reports that are days old before anyone reads them. In that environment, a duration extension is an act of conviction rather than analysis.

The current rate environment raises the stakes on getting this right in both directions. Extending unnecessarily into longer-dated instruments, only to be forced into a liquidity event, carries real cost. But sitting in cash when a constructive opportunity exists to lock in yield is also a failure of execution. Accurate cash forecasting is the mechanism that allows treasury to navigate between these two failure modes with confidence.

What Good Forecasting Infrastructure Looks Like Right Now

The organisations best positioned to act on duration opportunities are those that have built their forecasting capability on live, normalised bank data rather than on lagged ERP outputs or manually maintained spreadsheets.

The core requirement is a consolidated, real-time view of cash across all accounts and entities, updated continuously from bank feeds, not refreshed on a monthly close cycle. 

On top of that foundation, treasury teams need the ability to run scenario analysis, modelling the cash position at multiple points in the future under different assumptions about collections, disbursements, and capital events. That kind of forward visibility is what turns a yield curve decision from a gut call into a defensible, data-backed position.

It also changes the nature of the conversation with the CFO and the board. When duration extension is on the table, treasury needs to be able to demonstrate that the liquidity position has been modelled under realistic stress conditions, not just explain that rates are attractive and the cash appears available. 

The current macro environment demands that kind of rigour. The geopolitical and inflationary volatility driving the changing treasury behaviours is exactly the kind of backdrop under which assumptions need to be stress-tested, not taken on faith.

The Association of Corporate Treasurers has long positioned cash flow forecasting capability as a defining characteristic of high-performing treasury functions. That gap is particularly visible in moments like this one, when the environment creates a genuine decision point rather than a passive holding pattern.

The Bottom Line

The Clearwater data is a useful signal because it captures actual behaviour, not stated intent. When treasury teams across 500 organisations move simultaneously out of cash and into longer-dated instruments at a pace not seen since 2022, that is a meaningful read on how practitioners are interpreting the rate environment. The consensus view is that the window to lock in yield is open, and that waiting for cuts that may not materialise is the wrong posture.

The forecasting question is the one that determines whether individual treasury functions can act on that consensus or whether they are confined to watching it happen. Duration decisions in the six-month to two-year range require a level of scenario-based cash visibility that many teams are not yet equipped to produce quickly or with confidence. That gap is not new, but the rate environment has made it more consequential.

For treasury teams looking to close that gap, Trovata's cash visibility and forecasting platform connects and normalises bank data in real time, enabling the kind of scenario analysis that makes duration decisions defensible rather than intuitive. Book a demo to see how it works in practice.