Trump Presidency Would Cause Spike In U.S. Bond Yields, Severe Inflation

A win for Donald Trump in the US presidential election in November would herald a spike in long-term US Treasury yields, said Edmond de Rothschild Asset Management's Chief Investment Officer Benjamin Melman, Nell Mackenzie reported for Reuters.

Ten-year US Treasury yields rose to more than three-week highs after the Biden-Trump debate.

Trump's approach on taxes and immigration would put pressure on the US labor market and the wider economy, Melman told a press conference on the firm's H2 outlook.

Ten-year US Treasury yields rose to more than three-week highs after the Biden-Trump debate, near 4.5%, in a move some analysts say reflects growing market expectations for a Trump win.

"What is true about Donald Trump, his program, is significantly inflationary," said Melman. "Even if the environment is bullish in fixed income...the long end of the US yield curve is less bullish in our view due to the US political risk premium."

Trump has pledged to impose tariffs on foreign imports, and up to at least 60% on Chinese goods coming into the US, which if passed on to US consumers in the form of price hikes would fuel inflation and impoverish many Americans.