We wouldn’t be surprised if the massive policy support that has been announced in the US in recent days had some adverse effect on Treasuries in the second half of 2020. After all, similar support rolled out during the darkest days of the Global Financial Crisis (GFC) in 2008 was followed by a sell-off in the US government bond market in 2009. Nonetheless, we would anticipate a smaller rise in Treasury yields this time around. And we doubt that it would last long either, just as the sell-off in 2009 unwound during 2010. The simple reason is that, like it did after the GFC, the Fed will probably keep policy exceptionally loose for a very long time.
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