| The possibility of a Republican sweep and what that would mean for markets has emerged as one of the biggest themes this week. The hot metric of the moment is the surge in the term premium, typically described as the extra yield investors demand to own longer-dated Treasuries instead of rolling over T-bills. While it's an esoteric indicator and one that can only be estimated because there's no way to see what the average T-bill yield over 10 years would be, it's still as an important measure of bond market risk. If Republicans have full control over Congress and the White House, the thinking goes that they would usher in more spending and tax cuts — on top of the inflationary pressures of Donald Trump's proposed tariff regime — at a time when US borrowing is highly elevated. All that adds up as more fuel for a selloff in the Treasury market, already mired in one of its worst losing stretches of the year. Bonds are on course for their first monthly decline since April, with the 10-year yield headed toward 4.25%, though prices are steadying today. Of course, there are other reasons for investors to sell bonds, especially as the strength in the US economy leads traders to price in a shallower path of Fed interest-rate cuts. And, as we wrote in Monday's newsletter, election guessing is notoriously tricky and polls show the two candidates in a dead heat. For more, check out this story on how Treasuries are selling off like it's 1995, and this bond market analysis by John Authers over at Bloomberg Opinion. | 
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