US Long-End Faces Increasing Scrutiny Amid Growing Debt Concerns

The US long-end is facing increasing scrutiny as the Treasury's attempt to dampen the rise in yields has only drawn more attention to the underlying issue - a growing debt load and limited ability or willingness to rein in the deficit.

While some announcements to cut back on wasteful spending are expected, without a major rethink from Congress, trimming the edges is all that can be achieved.

The market is looking at the Federal Reserve's favored inflation measure, the core PCE, this Wednesday, but so far, the CPI release has been benign alongside other indicators.

This could mean Fed Chair Kevin Warsh may not provide the clarity the market seeks when he delivers his speech at Jackson Hole on Friday.