Bank of America: If US Long-Term Bond Repo Program Fails, Risk Assets Will Face Pressure

TechFlow reported on August 21 that Bank of America strategist Hartnett said if the US Treasury’s plan to control long-term bond yields fails, the dollar will come under pressure, sparking short positions on risk assets ahead of the November midterms. Hartnett noted that if Treasury Secretary Bessent cannot bring 30-year yields below 5%, he expects the dollar to fall over the coming weeks and anticipates increasing short bets on risk assets such as AI mega-cap companies and private credit. Financial stocks will also face short-selling risks. Hartnett wrote: “The policy panic aimed at repairing the fixed-income market should cap but not lower US Treasury yields.” (Jin10)