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U.S. bond yields are linked under the impact of oil prices, and "energy speed bumps" affect the path of global interest rates (Goldman Sachs)

2026-07-11·ima-daily5min-0711-20-1ab88f5f5c

Street Signal | U.S. bond yields are linked under the impact of oil prices, and "energy speed bumps" affect the path of global interest rates (Goldman Sachs)

Goldman Sachs' rate trader report revealed an important development in the market last week: U.S. Treasury yields are highly correlated with oil prices. Data show that when Brent crude oil rose from $71/barrel to $79/barrel, the 2-year and 10-year U.S. Treasury yields surged by 12 and 16 basis points respectively.

The transmission mechanism behind this is that rising oil prices have pushed up inflation expectations, which in turn strengthened market expectations that the Federal Reserve will maintain tightening policies, leading to a sell-off in bonds.

The report defines this phenomenon as an "energy speed bump" and incorporates it into the global interest rate forecast model, believing that this will have a spillover effect on other markets, including Canada and the euro zone. One-sentence conclusion: Oil prices have become the main driving force for short-term interest rate fluctuations.

The transmission chain of "energy-inflation-interest rates" is becoming increasingly tight. Investors need to pay close attention to this macro risk factor. Positive/negative: negative for the global bond market, especially long-term bonds. Positive for TIPS and energy stocks.

The market has responded to rising oil prices, but if oil prices remain high, the secondary impact on interest rates has not yet been fully priced in. Catalysts:

1) The next direction of Brent crude oil prices;

2) U.S. CPI data this week, verifying the transmission of oil prices to core inflation;

3) Fed officials’ stance on the impact of oil prices.

Full text

U.S. bond yields are linked under the impact of oil prices, and "energy speed bumps" affect the path of global interest rates (Goldman Sachs)

Goldman Sachs' rate trader report revealed an important development in the market last week: U.S.

Goldman Sachs' rate trader report revealed an important development in the market last week: U.S. Treasury yields are highly correlated with oil prices. Data show that when Brent crude oil rose from $71/barrel to $79/barrel, the 2-year and 10-year U.S. Treasury yields surged by 12 and 16 basis points respectively. The transmission mechanism behind this is that rising oil prices have pushed up inflation expectations, which in turn strengthened market expectations that the Federal Reserve will maintain tightening policies, leading to a sell-off in bonds. The report defines this phenomenon as an "energy speed bump" and incorporates it into the global interest rate forecast model, believing that this will have a spillover effect on other markets, including Canada and the euro zone. One-sentence conclusion: Oil prices have become the main driving force for short-term interest rate fluctuations. The transmission chain of "energy-inflation-interest rates" is becoming increasingly tight. Investors need to pay close attention to this macro risk factor. Positive/negative: negative for the global bond market, especially long-term bonds. Positive for TIPS and energy stocks. The market has responded to rising oil prices, but if oil prices remain high, the secondary impact on interest rates has not yet been fully priced in. Catalysts: 1) The next direction of Brent crude oil prices; 2) U.S. CPI data this week, verifying the transmission of oil prices to core inflation; 3) Fed officials’ stance on the impact of oil prices.

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