Investors Baffled by Surging Treasury Yields Amid Theories of Tighter Fed Policy, Deficit Concerns and Shifting Demand

The surge in US Treasury yields has puzzled investors as there is no clear explanation for the rise. Yields have climbed to multi-year highs before pulling back recently.

One theory is that expectations for more aggressive Fed policy to combat economic strength and inflation have driven yields higher.

Another view is that bond investors are growing concerned about unsustainable US deficit spending requiring higher yields.

Reduced demand, with central banks no longer buying bonds, may also be boosting yields.

Still, some expect global savings and demand for safe assets to continue supporting Treasuries, despite demographic and policy changes.