US Government Faces Dilemma as Bond Yields Hit Multi-Decade Highs
Long-term US Treasury yields are approaching two-decade highs, driven by factors that appear to be more than temporary. The US government is finding it increasingly difficult to manage its borrowing costs amidst rising deficits and substantial debt issuance.
The US government is paying more to borrow, and it has fewer easy options to reduce those borrowing costs. Long-term Treasury yields are near their highest levels in two decades, and the factors behind the move do not appear temporary. Washington is issuing large amounts of debt to help finance deficits that are…