"Investors still have faith that the dollar itself, regardless of the state of the actual government, will continue to be the global currency of choice and keep value in a fraught political situation."
Yields on 10-year and 30-year Treasuries reached their highest since 2007, extending yield curve steepening which has been a key dynamic of the past month's abrupt selloff.
The impending barrage of T-bills is a precursor to a glut of longer-term debt issues, which might result in a "demand vacuum" for longer-maturity bonds that pushes yields higher and tightens financial conditions.
"The Fed is regaining their inflation credibility, slowly. As they get inflation closer to the target, their long-run rate will again serve as a credible anchor for yields."
