Steven Major Sees List of Factors in ‘Drip, Drip Higher' of Long-End Bonds

• Central banks' rate-hiking cycles are ultimately dictated by underlying debt dynamics.
• Long-end bond yields are rising due to a combination of risk premium, fiscal dynamics, and international factors, not just supply.
• Short-term yields (2-year) are primarily explained by policy rate expectations, but 10-year+ yields are influenced by broader, more sophisticated factors beyond simple supply/demand.

Steven Major discusses various factors contributing to the 'drip, drip higher' in long-end bond yields, emphasizing that it's more complex than just debt levels. He highlights the role of strong earnings requiring higher risk premiums, worrying fiscal dynamics, and international influences. While short-term yields are policy-driven, long-end yields are influenced by a sophisticated interplay of stock performance, global market conditions, and fiscal risk premium.