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US real yields rise as markets price more Fed tightening
BNY Markets says the move is linked to expectations of further policy tightening rather than inflation fears, while long-term breakevens have stayed rangebound.
BNY Markets’ John Velis says US real yields across the curve have risen sharply, with the change driven more by expectations for additional policy tightening than by worries about inflation, according to FXStreet.
FXStreet notes markets expect the Fed and other central banks to respond to inflation, pushing long term yields higher while breakevens remain rangebound.
The outlet also points to support for higher real rates from robust growth, AI related capital expenditure, and contained term premia, citing Velis’ assessment.