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Gregory Daco highlights that a surge in longer-maturity U.S. Treasury yields is putting global bond investors in a difficult position. These investors are weighing the opportunity to lock in rates near multi-decade highs against the risk of a deeper bond market selloff.
Daco previously noted that U.S. inflation is rising while real wages are declining, pushing consumers to rely more on savings and credit than in 2022, according to his recent commentary. He also reported that U.S. nonfarm business productivity increased 0.8% in the first quarter, with unit labor costs up 2.3% and output up 1.5% earlier this year. These factors add to the context for investor decisions around higher-yielding Treasuries.