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A sharp selloff in longer-dated U.S. debt and surging long-term borrowing costs were at the center of investor concerns on Monday. These developments have the potential to destabilize the U.S. economy and trigger corporate defaults.
The benchmark 10-year Treasury yield experienced a significant jump to around 4.682%. This had considerable impacts on the iShares 20+ Year Treasury Bond (NASDAQ:TLT) ETF and the iShares Core U.S. Aggregate Bond ETF.
In spite of the volatility in the bond market, TradeWeb data showed that short-term T-bills maintained steady yields of around 5.5%. This suggests that while long-term borrowing costs are rising, short-term borrowing remains relatively stable for now.
These recent developments highlight the ongoing uncertainty in the markets as investors grapple with changing economic conditions and monetary policy expectations. It remains to be seen how these factors will influence market trends in the coming weeks.
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