US Treasury's Moves Spark Increased Scrutiny on Growing Debt Load

The US Treasury's attempt to calm rising long-end yields has had an unintended consequence: it's drawn more attention to the growing debt load and limited ability or willingness to rein in the deficit.

Elevated deficits and high debt loads are not just a US issue, but also a concern for European bond markets, which have been grappling with these issues for some time.

Despite benign US inflation supporting the front end, long-end yields remain under pressure from fiscal concerns, resilient growth, energy risks, and renewed supply, keeping bearish steepening risks intact.