The sharp sell-off in US bonds may not yet be over, say fund managers and analysts, as they try to work out the longer-term impact of President Donald Trump and his policies on Treasury yields and prices.
Investors have already seen the yield on the 10-year Treasury rise from as little as 3.6 per cent in mid-September to about 4.8 per cent this month — its highest level since November 2023 — before falling back, slightly, to about 4.64 per cent. Bond yields move inversely to prices.
These moves have been driven, in part, by the so-called “Trump trade”, as investors started to price in an election victory for the Republican candidate and resulting policies that could add further fuel to an inflation rate already above target.
With yields of 5 per cent being talked about as a possibility by some commentators — and little clarity on how Trump will pursue his plans for trade tariffs, tax cuts and deportations of illegal…
