U.S. Treasuries continued this week’s retreat
Yields on the 10-yr note and shorter tenors to their highest levels since early 2025 while the 30-yr yield stopped just shy of its highest level since late 2007.
Today’s retreat was essentially a repeat of this week’s story as the rising price of oil kept Treasuries under pressure due to the inflationary implications. WTI crude added more than $5/bbl, jumping past $92/bbl while Brent crude made headlines, rising back above $100/bbl. Concerns about ongoing fighting between U.S. and Iran kept offering support to oil with President Trump threatening to intensify the military campaign.
Today’s selling was largely done at the open with 10s and shorter tenors remaining near their morning lows into the close while the long bond recovered some of its opening loss, keeping its yield just below the 2026 high.
Rate hike expectations have continued their upward drift with the market growing more confident that a 25-basis point increase will be announced in September. Crude oil settled at a six-week high while the U.S. Dollar Index rose 0.3% to 101.46.
Yield close:
2-yr: +6 bps to 4.36%
3-yr: +5 bps to 4.39%
5-yr: +5 bps to 4.46%
10-yr: +5 bps to 4.70%
30-yr: +2 bps to 5.17%