Treasury sell-off may begin to sting in primary

By Lewis McLellan
25 Feb 2021

The rise in US Treasury yields has begun to sour. While at first it was hailed as an indication that investors were anticipating rapid economic recovery and stimulus-borne inflation, it seems now to have outstripped inflation expectations. The sell-off shows little sign of slowing, and if the volatility does not abate, primary markets could begin to suffer.

The 10 year US Treasury is scraping 1.5% at the time of writing on Thursday afternoon — its highest level since before the precipitous collapse in late February 2020, as the economic impact from the coronavirus pandemic first began to take its toll.

Until the last few weeks, ...

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