US Recession Is Key to Whether BOJ-Fueled Treasury Selloff Lasts
- US 10-year yield jumped after news of Japanese policy tweak
- Yields remain well below levels they reached earlier in year
A trader works on the floor of the New York Stock Exchange.
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Treasuries slumped for a third straight day Tuesday in the wake of a surprise tweak by the Bank of Japan to its policy of yield curve control that fueled debate about whether a nascent rally in bond markets is now over or just on pause.
With US recession risks swirling, questions around inflation unresolved and the path of Federal Reserve policy up in the air, investor appetite for Treasuries could well persist. While the shift up in US yields in the past couple of days has been substantial, 10-year Treasury rates are still down more than three-quarters of a point below their 2022 peak.