Joseph Adinolfi is a markets reporter at MarketWatch.
A rout in Treasury bonds that has helped trample stocks and revive recession fears in the U.S. took a breather on Monday, as long-dated Treasury yields recorded their biggest pullback since March.
Among them was Deutsche Bank’s George Saravelos, who pointed out in commentary shared with Deutsche Bank clients and MarketWatch on Tuesday that the yield curve had been steepening for five straight weeks, the longest such stretch in two decades. “he current bear-steepening regime is already the most sustained in at least two decades, and the risk is that it eventually transitions into a different regime,” Saravelos wrote.
That would likely result in short-term rates rising faster than long-dated rates — the dynamic that dominated the Treasury market in 2022 as the Fed rushed to hike interest rates at the fastest pace since the 1980s.
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