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Big is not so beautiful for bonds

The passage of Donald Trump’s ‘one, big beautiful bill’ through the House of Representatives today has done little to calm nerves in the bond market, which had already been frayed by Moody’s recent decision to downgrade the US’ sovereign credit rating and yesterday’s poorly received 20-year auction. We don’t foresee a fiscally induced ‘crisis’ in the Treasury market. But unless the bill is watered down by the Senate, there is clearly a risk of yields rising even further.

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