Investors have reason to worry about inflation, but that may not be the main
driver of rising yields. Breakeven inflation is roughly in line with the Fed's
2% long-run target. A Capital.com analyst said investors can assume long-term
inflation of about 2-2.5%, but oil, tariffs, fiscal policy and other supply
shocks make that estimate less certain. She said the bond sell-off is being
driven by persistent inflation risks, large-scale government borrowing and
intensifying capital competition, rather than by a sharp rise in expected
inflation alone.
