The term premium is seen as protection against unforeseen risks such as inflation and supply-demand shocks.
Comments from U.S. central bankers this week have stressed the need for vigilance around inflation.
Investors are in need of a silver lining after the worst selloff of Treasurys in more than four decades.
A key baseline for the cost of money has jumped more than four percentage points over three years.
The International Monetary Fund's former chief economist warned the Fed “still has a fight ahead.”
Yields on longer-dated bonds have been pushing sharply higher, drawing closer to their short-term counterparts.
If a shutdown begins on Oct. 1, S&P said it expects the federal government to continue providing essential service.
The measure of how much long-term bond investors are compensated had reached a generational low in 2020, partly due to declining inflation.
Markets have been on watch for further credit actions after Fitch Ratings downgraded the U.S. earlier this year.
Bond yields have been rising since the Fed last week signaled that it may raise rates once more this year.
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