, Columnist
What Happens in Treasuries Doesn't Stay in Treasuries
The pickup in U.S. funding costs is starting to be felt across the globe.
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President Donald Trump's $1.5 trillion of tax cuts have to be funded somehow. Step forward ever more U.S. Treasury bills and notes. As the bulk of the new supply is coming at five-year maturities or less, that's having a pronounced effect on the U.S. yield curve. And markets on the other side of the world are starting to feel it.
The U.S. Treasury two-year note yield has more than doubled in the last year to 2.4 percent. Over the same period the 10-year note has risen at only half the pace -- it now yields only 43 basis points more than the two-year, the narrowest gap since 2007.