Barclays on US Treasuries, say that despite the selloff already that have pushed 10- and 30-year yields to their highest levels since 2007 and 2011 "yields are not stretched".
Higher rates are being driven by:
- data showing a resilient U.S. economy
- Atlanta Fed's GDPNow forecasting model projecting real gross domestic product growth that could come in at 5.8% for Q3
- the minutes last week from the FOMC's most recent meeting revealed the possibility of more interest rate hikes to come
- higher real (inflation-adjusted) yields
Barclays point out "building stress" in the options market indicating that "investors are getting worried about a large further selloff"
And question if the Fed is done:
- "An economy growng above trend, potentially even accelerating, despite the tightening of policy, calls into question whether monetary policy is even tight"
![us 10 year Treasury yields rising 21 August 2023](https://images.forexlive.com/images/us%2010%20year%20Treasury%20yields%20rising%2021%20August%202023_id_0fb4382e-bbcb-4ee1-bd2f-4c59450370e0_size900.jpg)
10 year Treasury yields