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On the Road to US Fiscal Ruin
['Desmond Lachman']
American Enterprise Institute – AEI
Another indication of a country heading towards bond market trouble is an increased reliance on more market sensitive lenders with shorter investment horizons.
Here too there is reason for concern in the US government bond market.
Recent long-term bond yield increases are yet another sign that real trouble is brewing in the US bond market.
Normally at a time of heightened geopolitical tensions, one would expect US bond yields to decline as investors sought the US bond market’s haven.
Over the past year, 10-year Treasury bond yields have increased by more than 75 basis points to their present level of around 4.65 percent while 30-year Treasury bond yields are now uncomfortably above 5 percent.