The cost of US government borrowing surged following a Supreme Court ruling that increased the likelihood of a second Donald Trump presidency.
US Treasury yields, which represent the return the government promises to pay to its debt buyers, climbed after the court ruled that Trump cannot be prosecuted for official actions.
On Monday, the court delivered a significant boost to Trump, who has sought to claim presidential immunity for his actions related to the January 6 riots.
The 10-year bond yield rose nearly 14 basis points to 4.48% at the start of the week, as analysts considered the potential for higher tariffs and increased government borrowing if the Republican nominee wins the election.
During Tokyo trading hours overnight, the 10-year yield stood at 4.45%.
President Joe Biden’s faltering debate performance last week triggered the yield surge, but an additional catalyst came with the Supreme Court’s ruling, according to Chris Weston, head of research at Pepperstone.
He noted, “Bond traders are eyeing Trump’s increasing odds of taking the White House, and the market senses that a second Trump presidency would be inflationary.”
