US Treasury yields on the way up???

[Gecko123]

I think both foreign and domestic investors are beginning to demand a premium for loaning money to the US government, especially while the MAGA administration is in charge.

 

Between his exhausting tariff announcements, his faltering commitment to NATO and Ukraine, and a distaste for his autocratic efforts to take over the government, Trump has eroded confidence in the US Treasury to the point where many investors are either refusing to purchase US government securities or demanding a much higher premium to compensate them for the political risk that the US government can no longer be trusted. I, for one, no longer have confidence that the US will never default on its national debt, and view his enthusiastic embrace of crypto currencies with a high degree of suspicion.

 

Additionally, foreign central banks will likely not hesitate to use boycotting American debt as a tool in a trade war (and there is evidence that this has already begun), which will put further upper pressure on yields. Even though the US may well be heading already towards a recession, which will no doubt cause the Fed to cut interest rates, I believe the longer end of the yield curve will remain higher than it would otherwise be because of the above factors.

 

Would invite anyone who agrees or disagrees with this macro economic analysis to share their opinions.