Bond Market Squeeze Hits US Economy Amid Inflation Fears

The US bond market is feeling the squeeze as inflation concerns rise and a proposed $1.3 trillion stimulus looms on the horizon.

US producer prices jumped 5.4% year-over-year in August, keeping inflation pressures high. The 10-year Treasury yield also moved close to 5%, increasing pressure across the bond market.

The US Treasury increased long-term debt buybacks to $6 billion to support market liquidity. However, the move may not be enough to offset the impact of rising interest rates and inflation on investor sentiment.

Bitcoin, which had rallied from below $65,000 to around $82,000, stalled as yields climbed. The cryptocurrency's price movement is closely tied to changes in the bond market and monetary policy.