Fiscal Finesse in a High Yield Environment The US Treasury's long term yields and real rates have reached their highest levels in nearly a quarter century, sparking concerns about inflation.
However, David Bianco of DWS attributes this rise not to inflationary pressures but rather to the country's fiscal fundamentals.
According to Bianco, the root causes of the Treasury yield surge are structural: unsustainable US deficits exceeding 6% of GDP, a ballooning total debt to GDP ratio, and dwindling foreign demand for dollar denominated assets.