A step-up in borrowing by the US government has deepened a decline in bond markets that has sent yields to their highest point since 2007, analysts and investors say.
Much of the recent bond rout reflects a shift in expectations about the future path of interest rates and economic expansion. Friday’s data showing strong US jobs growth heaped further pressure on bond prices, as it added to the anxiety that interest rates will need to stick at high levels to defeat inflation.
But investors and analysts say a recent deluge of new debt hitting the market has also pushed yields higher, particularly on longer-dated bonds that have been hit hardest. Demand from big Treasury buyers such as foreign investors, foreign central banks and US banks has meanwhile remained stagnant.