US Bond Strategists Warn 10-Year Yields Will Stay High as Real Yields Outweigh Iran War
Updated
Updated · Bloomberg · May 24
US Bond Strategists Warn 10-Year Yields Will Stay High as Real Yields Outweigh Iran War
8 articles · Updated · Bloomberg · May 24
US bond strategists say longer-term Treasury yields are likely to remain elevated even if the Iran war ends, signaling borrowing costs may not fall with any easing in geopolitical tensions.
Real yields — which strip out inflation expectations — are exerting a bigger influence on US long-dated bonds, suggesting investors are demanding higher returns for reasons beyond war-driven price fears.
That weakens the view that the recent rise in yields is mainly an inflation trade tied to the conflict, and points instead to more persistent pressure in the bond market.
For markets, the warning implies financing conditions could stay tight across the economy even if oil and headline inflation concerns recede.
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