Deutsche Bank: The downgrade of the U.S. credit rating increases the risk of a steeper U.S. Treasury yield curve

Deutsche Bank's research department stated that Moody's decision to downgrade the U.S. Treasury bond rating from Aaa to Aa1 increases the risk of a steepening U.S. Treasury yield curve. While Moody's is catching up with other rating agencies, this downgrade serves as a reminder that fiscal challenges are intensifying. This "could exacerbate the steepening tendency of U.S. Treasuries ahead of this week's 20-year Treasury auction." However, after other rating agencies previously downgraded U.S. Treasury bonds, investors tended to buy when U.S. Treasuries softened, and this time is likely to be a similar situation