Heavy supply likely limits the downside in 10Y yields

Treasury bond yields are off recent highs but still up 40bps+ YTD and at the highest levels in 15 years. This is despite a decline in the inflation rate and an expectation from our Economics team that disinflation will continue. But bond yields are high not just because inflation is higher than recent trend, they're also high because of higher bond supply and less demand. Megan Swiber from Rates Strategy discusses the $8T of Treasuries that will need to be refinanced over the next year, the vicious cycle created by higher rates, but the reprieve we could get if rates and the economy cool off . . . assuming the cooling isn't of the deep freeze variety

 

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