Treasury yields have spiked significantly, is there a US recession lurking around the corner? Here's what you need to know

The US government bonds had sold off the last time in such major volumes during the time the US Federal Reserve had decide upon slashing interest rates, and yet again Treasury yields are showing a certain amount of volatility which is worrying the entire US markets about the possibility of an incoming recession.

Is a US recession lurking around?

A US recession has been one of the primary concerns for the US economy for quite some time, but had subsided at a point when the Federal Reserve had issued a whopping 50 bps rate cut, that was seen as a big and aggressive remedy for recession possibilities. However, it was later observed that there are other market forces in play as well, including employment data, that could lead to a sudden spike in the possibilities of a recession in the US economy.

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Treasury yield rise, a point of concern?

According to Steven Zeng, an interest rate strategist at Deutsche Bank AG, rising Treasury yields indicate a possibility of a recession under development that could come crashing down on the US economy as soon as the time is ripe. Meanwhile, more rate cuts by the Federal Reserve could be one viable solution to back things up and keep factors like recession and inflation levels at bay for the time being. There are reports claiming that the Fed may slash interest rates by up to 128 bps through September 2025.

Global bonds have also been taking a dip this week, which is also a major point of concern for the US markets, as international trends have an affinity for affecting Wall Street at any point of time.

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FAQs:

Is there a possibility of a US recession?
There is a major chance of an impending US recession affecting the national economy of the United States, as major market factors are indicating towards the same.

Are the Treasure yields rising?
The Treasury yields, according to reports, backed by a solid US economy, is currently on a steady rise at this point.