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Simon Dixon, chief executive officer at BankToTheFuture, highlights that U.S. 10-year Treasury yields are approaching 5 percent, with mortgage rates now back above 7 percent.
Dixon points to the significant rise in borrowing costs for the U.S. government, noting that the Financial Industry Committee now requires a yield of about 5 percent to lend to the U.S. government for a decade. He describes this as a very expensive cost of capital for an economy with the world's reserve currency.
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Earlier this year, Dixon raised concerns that changes in the bond market could mean the U.S. risks its status as the global reserve currency, as detailed in a previous analysis. He has also assessed how companies in the Middle East have seen profits linked to war and reconstruction, explored in a separate report. Dixon’s recent comments add to his ongoing focus on interest rates and capital costs.