Mike Sanders, head of the fixed income division of Madison Investments, said in a report that the continued steepening of the US Treasury yield curve highlights a key point about the impact of monetary policy measures. He said, “Policy measures can have a significant impact on the front end of the yield curve, but long-term structural issues, including higher-than-target inflation and huge fiscal deficits, will continue to put pressure on the back end. “He said Federal Reserve Chairman Jerome Powell acknowledged the weakening labor market, which soon brought buying into the bond market, reversed the initial decline in US Treasury bonds, and made the yield curve steeper. Madison anticipates that the pace of further easing by the Federal Reserve will slow down thereafter, and expects the central bank to stay on hold until the second quarter of 2026.

Mike Sanders, head of the fixed income division of Madison Investments, said in a report that the continued steepening of the US Treasury yield curve highlights a key point about the impact of monetary policy measures. He said, “Policy measures can have a significant impact on the front end of the yield curve, but long-term structural issues, including higher-than-target inflation and huge fiscal deficits, will continue to put pressure on the back end. “He said Federal Reserve Chairman Jerome Powell acknowledged the weakening labor market, which soon brought buying into the bond market, reversed the initial decline in US Treasury bonds, and made the yield curve steeper. Madison anticipates that the pace of further easing by the Federal Reserve will slow down thereafter, and expects the central bank to stay on hold until the second quarter of 2026.