Torsten Slok, chief economist at Apollo Global Management, said the Iran war and
tariffs could lift US Treasury yields and that the pressure is largely unrelated
to US fiscal fundamentals. He added markets appear less worried about US
policymakers than about Japan and Germany. Global government borrowing costs are
rising as investors demand greater compensation for longer-duration debt.
Despite Treasury buybacks announced by BESSENT to curb long-end yields, US
yields have resumed higher. Market pricing puts the probability of a Fed rate
hike at the mid-September meeting at 69%. Slok said rising yields are already
transmitting to housing and autos—both highly rate-sensitive—while they do not
constrain AI investment.
