Analyst: If pressure on the Federal Reserve continues, the risk premium on government bonds may rise.

John Velis of BNY stated in a report that if the US government continues to threaten the independence of the Federal Reserve or if the situation becomes more chaotic, the risk premium on US government bonds may increase. He said that the term premium on 10-year US Treasury bonds - the additional yield that investors demand for holding long-term bonds rather than short-term bonds - has been slowly rising since mid-October. He said that the current premium of 80 basis points is one of the highest levels in the past decade, but "if the central bank's independence and credibility are seen as weakening, this premium may further increase."