In U.S. markets, views are spreading that the effects of Treasury buybacks have not been sustained and that concerns over fiscal deficits and inflation remain entrenched. Debate continues over upward pressure on long-term interest rates and the direction of the yield curve.
In U.S. markets, views have emerged that the effects of Treasury buybacks have not lasted, leaving fiscal uncertainty and inflation concerns as lingering sources of market caution. Several experts have commented on factors behind declining confidence in fiscal policy and rising interest rates.
Some point out that financing long-term debt buybacks through short-term debt issuance could theoretically flatten the yield curve, while many believe inflation has not yet converged and that upward pressure on interest rates will persist. Private-sector demand for funds has also been cited as a factor affecting interest-rate trends.