Search the work

IIF Global Macro Views: The Fiscal Channel in Long Yields

Marcello Estevão · Jonathan Fortun / Institute of International Finance

Marcello Estevão and Jonathan Fortun argue that higher US long term yields primarily reflect the real returns investors demand, rather than a sharp rise in inflation compensation. Persistent federal borrowing adds to financing pressures across the economy, but markets are not visibly imposing a larger Treasury specific premium than at the start of the year. Refinancing older debt at higher rates will continue to lift federal interest costs even if yields stabilize, while deficits before interest payments make the debt outlook more sensitive to growth and interest rates.

Reuters / Investing.com · Quoted expert

Fed at a policy, political crossroads poses global risks

The article cites Fortun and Marcello Estevao's IIF assessment of a policy-driven US slowdown within a broader discussion of Federal Reserve independence and international spillovers.