Wall Street juggernauts like Goldman Sachs, Morgan Stanley, and Barclays are re-examining the impact of President Trump's winning the U.S. presidential election in November on the bond market. After last week's debate diminished the chances of U.S. President Biden's re-election, Wall Street strategists are urging clients to prepare for sticky inflation and rising long-term bond yields. On the product structure side, the operating incomes of 10-30 billion yuan products were 401/1288/60 million yuan respectively.

Morgan Stanley strategists including Matthew Hornbach and Guneet Dingra argued in a weekend report, 'Now is the time' to bet on a rise in long-term rates relative to short-term rates. Morgan Stanley said that Trump's ascent in opinion polls since last Thursday's debate meant investors had to consider the economic policies that might lead to further Fed rate cuts, as well as the Republican victory leading to fiscal expansion and rising long-term bond yields.

Meanwhile, Barclays said the best way to hedge against the possibility of a Trump victory is to hedge against inflation risks. Strategists Michael Pond and Jonathan Hill wrote on Friday that the clearest narrative is betting on the performance of a five-year inflation-protected bond (TIPS) versus a standard five-year U.S. bond.

Buy-side investors, such as Jack McIntyre, portfolio manager at Brandywine Global Investment Management, are also increasingly paying attention. McIntyre said he is 'worried bond vigilantes will come out too early and respond to the debate's outcome' and that Biden's showing, weak economic data and rising oil prices increase the likelihood of a Republican landslide in November's election.

U.S. Treasuries dropped on Monday, pushing yields to their highest level in weeks as traders said they continued to feel the effects of Trump's rising chances of re-election last week. The rise in U.S. Treasury yields was led by the longest-dated debt, with the 30-year U.S. Treasury yield rising 9 basis points to a daily high of 4.65%, the highest level since May 31.

Not all Wall Streeters believe that a rise in long-term U.S. Treasury yields and a steeper curve is inevitable. Goldman Sachs strategists led by George Cole and William Marshall wrote after the debate, 'While the consensus is that long-duration driven selling has become the response of U.S. Treasury yields to a Republican victory, we see evidence of flattening risk-taking views.' They believe investors' focus will shift from fiscal spending to the risk of a tariff hike, and as the election approaches, a tariff hike could weigh on productivity and economic growth.

Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, said that assumptions about how Trump's policies will affect the market are shaky due to the uncertain composition of the U.S. Congress after November. Jones said in an interview on Monday, 'The biggest risk to the U.S. Treasury market is the changing nature of policy talk after the election. I just think it's too early now. Candidates can say a lot of things in a campaign, but they've got to get it through Congress.'

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