Markets began 2026 expecting interest rate cuts. Instead, investors have faced a sharp repricing in bond markets, with the US 10-year Treasury yield reaching 5% and growing debate around whether policy may need to remain restrictive for longer.

In this episode of Barclays Brief, host Patrick Coffey speaks with Dan Orlando, Head of US Rates Trading, about one of the most important questions facing investors today: why has the US economy remained so resilient despite elevated yields and restrictive monetary policy?

The discussion explores what has driven the recent move higher in Treasury yields, how investors are reassessing the outlook for interest rates, and why this cycle appears different from previous periods of monetary tightening. Orlando explains how a surge in AI-related capital expenditure and data centre investment is helping support economic activity, potentially reducing the impact that higher borrowing costs would normally have on growth.

The conversation also examines the housing market, Treasury buybacks, investor positioning and why developments in US rates increasingly need to be viewed through a global lens as bond markets across the US, Europe and Japan continue to move together.

For investors, the key issue is not simply whether rates remain higher for longer, but whether restrictive policy is having the same effect on economic activity that it has in previous cycles, and what that could mean for markets if growth continues to prove resilient.

Clients can read more on Barclays Live:

• The dog that did not bark for now
• United States: Interest Rates: On the brink

Listeners can also explore the topic further:

• Ep 47: The Multi-Trillion-Dollar Energy Race
• Ep 42: AI credit supply tests market capacity
• Ep 41: Challenging market consensus
• Ep 40: Cooling the AI buildout

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