Stronger Growth Accounts for Most of Jump in U.S. Yields

Stronger Growth Accounts for Most of Jump in U.S. Yields

Bloomberg Economics’ model shows that, of the 84-basis-point increase in the 10-year U.S. Treasury yield since the start of the year, 60 are attributable to expectations of stronger growth. That’s a clear contrast to the 2013 taper tantrum, when the rise in yields was driven by expectations of premature monetary-policy tightening by the Federal Reserve. The consequences for the rest of the world should therefore also be very different -- with rising yields a cost, but spillovers from stronger U.S. import demand an offsetting benefit.

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