美债收益率上升引发市场风险担忧

What is going to end up driving the ten year? Is it concerns about inflation? Is it concerns about the deficits? Is it concerns about something else geopolitical tension more broadly. Are we going to continue to see yields cranking higher on the yield curve, continuing to steepen in the way that it is. So it's a combination of inflation expectations time premia um fiscal concerns as well. But yields are very attractive at the moment.

So I think that that's reflected in the demand. But there is a hell of a lot of issuance coming through. And as you mentioned earlier, it's not just from the Treasury, it's also from the corporates as well. All in the long and clearly an inflationary backdrop. We can negotiate our debate about exactly to what extent. But I think the backdrop for treasuries is very negative. And I think that pressure is going to increase in the year end.

The expansion hyper scalar debt doesn't help. Is the fed behind the curve at this point that I do think they're behind the curve, but there's the risk that if they don't move next time, given the reaction last time, they do become so. Because if you know where I live from out of space and in this economy, you'd think right now, hang on, inflation has been above target for five years as we keep hearing it's had a fresh impulse this year, given the Iran shock, given the risk that the long end of the curve is going to rise if you don't get a grip on inflation near term.

I think they've got to take action. What does that mean for the rates outlook, though in terms of it does seem like there's a higher floor on where yields are. We think the risk in the bond market is very asymmetric. So it's very hard in my mind to really see a big bond market rally unfolding, to see like a sustained bond market rally for six nine months. Where's that going to come from if the central banks won't be cutting?

And surely that's very unlikely in this scenario, the back end of the curve really should be under pressure, just given the poor debt and deficit dynamics. And so you could you would argue for a much steeper yield curve where, where short term interest rates should be quite well behaved. And longer term rates are sort of the release valve for some of the higher yields at the long end. Is that more of a story of, of fiscal spend or ie issuance?

What is the biggest driver that that could well be I mean, especially when it comes to fiscal spending. Right. It feels like the bar for investors and bond market has been set higher, particularly in the U.S.. I mean, you've seen in the last few weeks, actually, U.S. yields on the long end of the curve has have underperformed, have risen more than in other in other markets. And that means that that bar has been set higher.