A former IMF economist says he's worried that military spending will widen the US deficit and jack up borrowing costs

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• US 10-year Treasury yields have surged as the Iran war prompts new inflationary fears.
• Desmond Lachman warns they could also be rising due to investor fear around rising US deficits.
• The US will have to ramp up military spending as the conflict with Iran continues, he said.

Yields on 10-year Treasury bonds are surging, and it might not simply be because the market is worried about the inflationary impacts of higher oil prices.