Authored by Simon White, Bloomberg macro strategist,

US yields are biased lower in the coming months as the economy adjusts from pro-growth Trump euphoria to the reality of a new administration that appears to be intent on making significant reductions to government spending.

The flash PMI for February, released last Friday, may well have been the shot across the bows to expect a weaker period for the economy and therefore for yields in the coming months. The drop in the composite index was driven by a fall in the services component, due principally to greater uncertainty in the business environment, tariffs and government spending cuts (with DOGE figurehead Elon Musk recently holding aloft a chainsaw gifted to him by Argentina President Javier Milei).

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