Citigroup strategists expect oil prices and the US labor market to weaken, which will put pressure on the dollar and ease the pressure on long-term yields. “The pressure relief valve will shift to foreign exchange,” Adam Pickett and other strategists wrote in the report that they believe that rising energy prices and positive economic growth are driving up yields: “This increase in yield is entirely an increase in real yields, and is mainly consistent with the trend in energy prices.” Fiscal concerns, inflation expectations, or large-scale corporate bond issuance are the reasons for the rise in treasury bond yields. They only see “weak evidence” that they continue to short the dollar through the euro, gold, and high-yield emerging market currencies while maintaining multi-risk energy positions on US stocks Falling prices and a weak labor market should also ease the pressure on Treasury Secretary Scott Bessent, who has previously expanded repurchases to curb rising borrowing costs. “The good news for Bezent is that the oil market and the US labor market will weaken according to Citi's expectations.” They added that it is unlikely that more significant action will be taken on treasury issuance or fiscal policy until the November 2 quarterly refinancing announcement and November 3 midterm elections.

Citigroup strategists expect oil prices and the US labor market to weaken, which will put pressure on the dollar and ease the pressure on long-term yields. “The pressure relief valve will shift to foreign exchange,” Adam Pickett and other strategists wrote in the report that they believe that rising energy prices and positive economic growth are driving up yields: “This increase in yield is entirely an increase in real yields, and is mainly consistent with the trend in energy prices.” Fiscal concerns, inflation expectations, or large-scale corporate bond issuance are the reasons for the rise in treasury bond yields. They only see “weak evidence” that they continue to short the dollar through the euro, gold, and high-yield emerging market currencies while maintaining multi-risk energy positions on US stocks Falling prices and a weak labor market should also ease the pressure on Treasury Secretary Scott Bessent, who has previously expanded repurchases to curb rising borrowing costs. “The good news for Bezent is that the oil market and the US labor market will weaken according to Citi's expectations.” They added that it is unlikely that more significant action will be taken on treasury issuance or fiscal policy until the November 2 quarterly refinancing announcement and November 3 midterm elections.