- The anticipated increase in US debt issuance in Q2 2024 could intensify pressure on the UST market, but the expansion of the Treasury buyback program may alleviate liquidity concerns for longer-dated USTs.
- The current uptrend in UST yields may persist over the long term due to the risk of sustained inflationary pressures, leading to expectations of higher real interest rates in the US. This could be amplified in Asia by the concurrent depreciation pressures from the Yen and Yuan.
- Maintaining stability in SBN yields may become more difficult amid expectations of prolonged higher UST yields, although the expanded KLM incentive seems to be enough to encourage banks to expand their loan portfolios and bolster economic growth.
