Growth, Inflation Seen in Driving Seat for Higher Long-End U.S. Treasury Yields

Dow Jones
08/20

0538 GMT - Long-end Treasury yields have been driven higher with persistently stronger growth and elevated inflation hinting that interest rates "are simply not restrictive enough for the economy," TD Securities' Gennadiy Goldberg and Molly Brooks says in a note. Yields are also supported by supply-side considerations "as investors' conviction remains low--heavy hyperscaler and IG supply, fiscal concerns, and significant supply of competing long-end sovereign debt," the strategists say. Demand-side worries have also been key amid concerns over tepid global investor demand and moderating purchases of Treasurys by hedge funds for the basis trade, they say.

 

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