Joanne Bianco, senior investment strategist at BondBloxx, said U.S. Treasury
yields above 5% may look high but are not abnormal; the true outlier was the
post-global financial crisis era of persistently low rates. She cited resilient
U.S. growth, an upward revision to Q2 GDP, elevated oil prices and expanding
Treasury supply as the main drivers of higher yields. Bianco said large federal
deficits and growing issuance are leading investors to demand a higher term
premium to compensate for holding long-dated U.S. Treasures.
