Macro Insights Weekly: What to make of the US treasury selloff

The treasury market sell-off has coincided with easing core inflation and stricter control on US government spending. This vexing development is putting broader asset markets at risk.
US core inflation continues to ease, although rising oil has made the headline inflation sticky.
Between shutdown posturing and expiration of pandemic-era support, fiscal slippage isn’t a concern.
Yet, bond yields rose sharply last quarter. This can readily spill over into spreads.
A sharp repricing raises the risk of economic pain and financial instability.
Hopes of a soft landing in 2024 may well be dashed.