....this is the exact opposite of what Trump/Bessent had tried to engineer.
....what happens when supply of UST goes up under dwindling demand? US would have to pay a higher rate to get subscription.
....and what sounds even more ominous is that the US dollar could go much lower even as yields go higher.
....this happens when confidence is diminished or lost.
Investors are demanding higher compensation for holding US Treasuries:
The US Treasury term premium has jumped to ~0.75%, the highest in 11 years. The term premium is the extra return investors demand for holding a long-term bond compared to a series of shorter-term bonds.
This year alone, the Treasury term premium has risen by 50 basis points.
The ongoing trade war, sticky inflation, slowing economic growth, and US deficit spending are increasing uncertainty.
The term premium will likely continue increasing along with surging economic and fiscal uncertainty.
