The government bond market had been more or less flatlining since since President Trump on Apr. 2 announced “Liberation Day” and rolled out US tariffs, which sparked concern about inflation. But in recent days a new headwind is weighing on fixed income securities: a US government budget bill (that was approved by the House this morning), which is expected to significantly raise an already hefty federal deficit in the years ahead.
Daily Archives: May 22, 2025
Macro Briefing: 22 May 2025
US 30-year Treasury yield jumps to 5.09%, the highest level since late-2023. “It goes without saying that if Trump is, in fact, looking to the Treasury market as a barometer of investors’ approval of the action in Washington [with regards to the current debate over the federal spending bill], then the recent sell-off that brought 30-year yields from as low as 4.65% earlier this month to 5.095% is without question a troubling development,” said Ian Lyngen, an interest rate strategist at BMO Capital Markets.
