US bond market in 'structural bear market' per Jefferies
Jefferies global head Chris Wood warns long-term Treasury bonds face persistent pressure due to yield control risks.
Chris Wood, global head of equity strategy at Jefferies, stated that long-term US Treasury bonds are in a structural bear market. The firm noted the 10-year yield stood at 4.77%, hovering just above Treasury Secretary Scott Bessent's perceived 4.75% target line. Wood argued that attempts by Washington to suppress borrowing costs may weaken the dollar, potentially boosting gold and mining stocks. Investors are weighing factors like sticky inflation, accelerating economic growth, and heavy corporate investment in artificial intelligence as potential drivers for higher yields. The report suggests the Treasury has become more significant than the Federal Reserve in setting long-term yield direction. Bessent indicated US could increase Treasury buybacks at the long end of the curve or utilize funds from the Treasury General Account to purchase government bonds.
