Driving Off a Cliff?
Donald Trump’s tariffs will make the U.S. auto industry less competitive and leave the industry out of step with the auto market's shift to EVs.
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Tags: General, bond rates, federal debt, federal open market committee, Federal Reserve, fomc, interest rate policy, John Kemp, stimulus package, u s treasury, yield curve, zero interest
John Kemp is a Reuters columnist. The opinions expressed are his own
Yields on long-term U.S. Treasury debt continued to surge higher yesterday as the market braced for a future upturn in inflation and a tidal wave of long-dated issues that will be needed to fund the bank rescues and the emerging stimulus package.
Yields on three-year notes are up by around 47 basis points from their mid-December low. But yields on ten-year paper have soared 82 points and rates on the 30-year long bond have surged 114 points. Long-bond rates have retraced more than half their decline since the autumn
Back-end yields would probably have risen even further were it not for persistent hints the Federal Reserve is thinking about buying longer-dated issues to cap them. But the market has started to call the Fed's bluff.
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