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Michael Strain highlights concern over the swift increase in the 10-year yield. He suggests there are multiple possible reasons for this trend, including reduced credibility of the U.S. government and expectations that the Iran War could extend longer than previously anticipated.
Strain also proposes a more benign explanation, attributing part of the rise to persistent inflation.
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Strain previously noted that the Federal Reserve is unlikely to increase interest rates this week, citing recent FOMC signals in a recent article. He also expressed skepticism about Secretary Bessent's attempts to bring down long yields in an earlier report. These views add perspective to his recent comments on the factors behind rising 10-year yields.