Inflation expectations are the only thing that can boost bond yields - Morgan Stanley

Inflation expectations are the only factor that could lead to a sustained rise in bond yields, Morgan Stanley's Jim Caron told Bloomberg earlier this week. 

The US 10-year breakeven inflation rate, or the bond market's expectation of price pressures over the next ten years, rose from 0.5% to 1.8% in 5.5 months to Aug. 31 and was last seen at 1.66%, according to St. Louis Fed. 

The US 10-year treasury yield is currently trading at 0.75% at press time, having hit a four-month high of 0.79% on Tuesday.