NEW YORK, July 5 Reuters A recalibration of how the U.S. presidential election plays out is causing bond investors to bet yields stay higher for longer as November approaches.

Yields have risen sharply after President Joe Biden39;s stumbling performance against Republican rival Donald Trump in the first presidential debate last month, which increased speculation about a second Trump win when voters go to the polls on Nov. 5. The benchmark 10year yield rose about six points to 4.34 following the debate.

Some investors are betting on higher inflation under Trump because of trade and economic policies such as higher tariffs on imports, and profligate government spending along with lower tax revenues, which would boost fiscal deficits and U.S. debt levels. Trump39;s team has said his progrowth policies would bring down interest rates and shrink deficits.

Republican National Committee spokesperson Anna Kelly said in a statement that the market reaction to Trump39;s debate victory reflected the anticipation of the stronggrowth, lowinflation reality that President Trump will deliver once again.

Some have said a reckoning on U.S. debt will eventually catch up with the country and market.

The lens is really starting to turn to the fiscal and the debt dynamics, said MaryTherese Barton, fixed income chief investment officer at Pictet Asset Management. The ratecutting cycle is perhaps shallower than expected with a focus more on the longer end.

Those concerns around widening…