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Mark Zandi, chief economist at Moody's Analytics, highlights that Treasury yields have climbed largely because of the Iran War, which has raised inflation expectations.
He also attributes the jump in yields to the increasing federal budget deficit and the significant expansion of U.S. Treasury securities issuance required to finance the deficit.
Zandi previously noted that the Iran War is driving up U.S. Treasury yields and contributing to weaker economic conditions beyond just energy markets, according to a recent analysis. He has also warned that higher tariffs on imported goods have slowed job growth and damaged the U.S. economy over the past year, as described in an earlier report. These concerns have emerged alongside mounting fiscal pressures in the U.S.