BofA Securities on Wednesday recommended investors establish long positions on U.S. 10-year Treasuries, citing expectations that easing inflation will allow rates to ease from here.

U.S. 10-year yields have neared 3% this week, up from around 1.50% at the start of the year as inflation surges, prompting a hawkish turn from the U.S. Federal Reserve and a repricing of rate hike expectations.

"While CPI inflation is 8.5%, we believe the market may be overemphasizing inflation risks," BofA's analysts said in a report published on Wednesday.

"Our forecasts point to inflation peaking this quarter and falling steadily into 2023. We believe this will reduce the panic level around inflation and allow rates to decline."

Signs of a U.S. economic slowdown or an even more hawkish Fed could also push yields lower, the analysts said, but a risk is that inflation expectations could get out of hand.

The analysts said they established the long position, essentially a bet that bond prices will rise and yields fall, at 2.83%, targeting 2.25% and a stop level at 3.10%.

(Reporting by Yoruk Bahceli; editing by Dhara Ranasinghe)