LIVE MARKETS-Don't panic about bonds - yet
TLT•What could pressure bonds next
Furthermore, while dollar debasement worries have come back as the greenback has weakened and gold has strengthened, Mathews said there aren't many signs that investors are concerned that their purchasing power is being eroded by inflation.
But just because there isn't a crisis right now, doesn't mean there's not any risks to be aware of.
"The U.S. fiscal position is obviously poor. Partly because of that, our sense is that Treasury term premia are likely to rise further over time even if a sharp selloff is avoided," Mathews said.
Other potential near-term catalysts for fresh bond market trouble include the closely watched U.S. personal consumption expenditures price index data due Wednesday and the Jackson Hole conference.
"Chair Warsh’s previously stated views about the bond market, namely that the Fed's balance sheet could be smaller and that higher long-term yields might justify rate cuts, might be poorly received in the current market environment. Saying nothing (the topic of the symposium is “Financial Innovation: Implications for Payments and Policy”) could be even worse."
And of course, Mathews points out, there's also the U.S.-Iran war and the oil price moves that come with it to keep an eye on.
Bond sell-off raises worries, but no crisis yet
Last week's government bond sell-off caused plenty of worries across markets. But Capital Economics argue that there still isn't a bond crisis.
"We don’t think it’s time to panic about long-dated government bonds, even though the headwinds they face are gathering strength," Thomas Mathews, head of markets Asia Pacific at Capital Economics, said in a note.
