Some analysts say investors are demanding a higher “term premium” to buy government debt, reflecting growing worries about debt levels and deficits.
Analysts have attributed much of the rise in government bond yields this year to inflationary pressures from the war in Iran and the bullish growth expectations tied to the build-out of artificial intelligence infrastructure.
The rising yields, they say, reflect expectations that the Federal Reserve will keep interest rates elevated to tamp down inflation from higher oil prices and prevent the economy from overheating from the A.I. build-out.
