US Treasury yields: Why structural supply and demand pressures could keep rates high
BusinessLine 1 hr ago·2 Sept 2026, 5:22 am
US Treasury yields have been climbing, driven by a mix of persistent inflation and the US government's large budget deficit. Investors are demanding higher returns to hold these bonds, effectively pricing in a higher interest rate environment for the future.
This shift matters to Indian markets because higher US rates can pull foreign capital away from emerging markets like India. It also increases the cost of dollar-denominated debt for Indian companies, potentially weighing on their valuations.
Investors should watch for signs of cooling inflation in the US. If inflation remains sticky, yields may stay elevated, which could continue to pressure global equity markets, including India.
Excerpt from BusinessLine
P Higher long-end Treasury yields are unlikely to retreat anytime soon, and a host of intertwined supply and demand factors will likely hamstring U.S. policymakers seeking to cap borrowing costs. That is because the renewed surge in rates reflects immediate concerns about the inflation picture in the U.S., alongside…Read the original at BusinessLine
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