The trajectory of U.S. Treasury yields will depend on a few things, said Swissquote Bank’s Ipek Ozkardeskaya in a note. The fiscal choices made by the U.S., whether the budget is sustainable, and whether there is any long-term plan to rein in the debt.
Another question is the global investors’ approach, she said.
“Whether global investors are still willing to finance U.S. deficits, especially as confidence is also being dented by deteriorating geopolitical relationships, waning enthusiasm for the dollar, and reduced faith in Treasuries as safe-haven assets,” she wrote.