Rathbones sees Democratic midterm gains supporting US Treasuries
TLT•Rathbones’ November 4 analysis says Democratic control of Congress could support US Treasuries if lawmakers curb tax cuts and federal spending. It also says credible de-escalation of the Iran war could lower oil prices and inflation, while renewed attacks could raise inflation and interest rates.
1. Treasury outlook
Rathbones said Democratic control of Congress could support US Treasuries if lawmakers curb tax cuts and federal spending. It said credible de-escalation of the Iran war could lower oil prices and inflation, supporting bonds across the yield curve, while renewed US attacks on Iran would risk higher inflation and interest rates. Lower yields could boost equities and corporate bond prices; tighter regulation could moderately weaken equities and corporate credit in AI and financial services without triggering a market-wide sell-off. Longer-dated Treasuries could benefit from reduced future issuance and a lower fiscal term premium.
