U.S. Election Result Means Significant Upside Potential in Treasury Yields
By
Emese Bartha, Dow Jones Newswires
Irrespective of the U.S. election result, SEB Research had been expecting higher U.S. Treasury yields through 2025, chief strategist Jussi Hiljanen said in a note. The election outcome, however, means even more upside in U.S. yields for the coming on to two 2 years, he says.
This is due to more cautious interest-rate cuts by the Federal Reserve than previously projected to incorporate higher inflation and the impact of a larger budget deficit, he noted.
“Larger deficits will add more upside pressure especially to long yields,” he said. This will be reflected in a further increase in long-end risk premiums.
