Can Bessent's "Operation Twist" Really Cap Long-End Rates? Goldman Sachs: Fiscal Issues Are the Root Cause, Term Premium May Persist

Goldman Sachs noted that the US fiscal deficit, inflation uncertainty, large-scale AI-driven debt issuance, and market concerns over a higher equilibrium real interest rate are the drivers behind the recent rise in long-end US Treasury yields, while Treasury buybacks and adjustments to the issuance structure will not affect any of these factors. Therefore, Goldman Sachs believes this intervention is merely a temporary relief and will not change the trend direction of long-end yields.