New Delhi, Aug. 22 -- A fresh round of US policy support aimed at containing long-term Treasury yields is likely to prevent a further sharp rise in borrowing costs, but may not be enough to drive yields materially lower, according to BofA Securities said in a research report.

The brokerage warned that if policymakers fail to pull the 30-year Treasury yield below the critical 5 per cent level, markets could face a weaker US dollar and a shift away from leveraged risk assets, including AI stocks, private credit and cyclical financials.

BofA said the US administration is increasingly focused on preventing a rise in long-term borrowing costs from undermining government financing and the artificial intelligence investment boom. The US Treasu...