Quick overview

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Longer-dated US Treasury yields reached their highest level in 18 months.

 

 

Investors are concerned that US President Donald Trump’s tax bill, which is scheduled for a vote in Congress this week, could add roughly $3.08 trillion to the country’s $36 trillion debt load.

Markets’ gloomy attitude following Moody’s downgrade, with the dollar hovering close to its lowest level in two weeks relative to other major currencies, last week’s credit rating has left markets a little lulling as a “Sell America” narrative gains traction.

Additionally, investors have been searching for alternatives outside of the US because they believe it would not be immune to a global recession brought on by Trump’s unpredictable trade policies. Markets continue to have uncertainty and worries about growth, as well as worries about the ability of the US government to raise more debt.

Markets aim for longer-term diversification into emerging market nations, rather than simply expecting some mean reversion back toward dollar strength. Investors are hesitant to buy U.S. assets, especially after bond yields rose following the Treasury Department’s weak demand for the $16 billion sale of 20-year bonds.

Additionally, the yield on 30-year Treasury bonds remained above 5 percent.