Macro-Key: the United States sovereign debt yield curve between 2 and 10 years will be even more flat in the short term

In a report on 21 July, James Reilly, a senior market economist at the Kaiser Macro, stated that the 10-year and 2-year United States Treasury debt yield differentials were expected to shrink further in the coming months and could lead to a reversal of the yield curve. We believe that the continued warming of the Strait of Hormuz could lead to a complete reversal of the yield curve. In a two-year period, when real rates of return surged, real rates of return contributed to the flattening of the yield curve. As investors' expectations of interest rates rise further, we expect that the two-year and 10-year sovereign debt yield curve will level in the coming months. Kim Xian