Goldman Sachs said that despite the recent sell-off of long-term US Treasury bonds, there is no significant deviation in valuation compared to macro fundamentals or similar assets. The bank's strategist Friedrich Schaper wrote in a report that the US Treasury Department's recent announcement to expand the scale of bond repurchases shows that the authorities are more willing to use unconventional tools to support long-term treasury bonds. “However, as we have previously indicated on the overall trend of Japanese treasury bonds and the recent intervention in the yen, the impact of these actions may only last for a short time after the announcement is made if the underlying macroeconomic drivers are not addressed.” Goldman Sachs said that despite some encouraging fundamental news, the market still believes that the risk of rising yields outweighs the downside risk.

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