Treasury Bears Eye Tax Talks as Trigger for Yields to Rise Again

This month’s retreat in Treasury yields is temporary and tax negotiations among U.S. lawmakers may provide the next trigger for rates to run higher.

That’s the view of Priya Misra, global head of rates strategy at TD Securities in New York, who sees 10-year yields headed for 2% by year end, though “not in a straight line.”

While the Biden administration’s spending plans are expected to boost economic growth and bond yields, its tax agenda presents a significant counterweight. That makes the tension brewing among Democrats on taxes a must-watch area for traders, according to Misra.