## Are US treasury yields rising because of pre-election jitters? **US treasury yields** have been rising in recent weeks, leading some to speculate that investors are becoming nervous about the upcoming US elections. However, there are a number of other factors that could be contributing to the increase in yields, including the Federal Reserve's recent decision to keep interest rates unchanged. **One possibility is that investors are rotating out of stocks** and into bonds as they become more cautious about the outlook for the economy. The S&P 500 index has fallen by about 5% since the beginning of September, while the yield on the 10-year Treasury note has risen by about 20 basis points. **Another possibility is that investors are pricing in the possibility of a Democratic victory in the upcoming elections.** Democrats are generally seen as being more likely to raise taxes and increase spending, which could lead to higher inflation and lower bond prices. **However, it is also possible that the rise in yields is simply a reflection of the Federal Reserve's recent decision to keep interest rates unchanged.** The Fed has been raising rates gradually since 2015, and many investors were expecting another rate hike at the September meeting. The Fed's decision to hold rates steady surprised investors and led to a sell-off in bonds, which pushed yields higher. **It is difficult to say definitively what is causing the rise in US treasury yields.** However, it is likely that a combination of factors, including the upcoming elections, the Federal Reserve's decision to keep interest rates unchanged, and the recent decline in the stock market, are all playing a role. **Only time will tell whether the rise in yields is a sign of growing nervousness about the US economy or simply a temporary adjustment to the Fed's policy decision.**
