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The alarm sounds! U.S. long-term bond yields hit two-month high

2026-07-22·newswire-us-stock-004240
The alarm sounds! U.S. long-term bond yields hit two-month high.

As the countdown to the Federal Reserve's July interest rate meeting enters a week, long-term U.S. Treasury bonds once again encountered selling pressure on Tuesday (July 21), pushing the 10-year and 30-year Treasury bond yields to a new high in about two months.

The sharp surge in oil prices has heightened concerns about inflationary pressures, which in turn triggered panic about the possibility of the Federal Reserve raising interest rates. Market data shows that the 10-year U.S. Treasury yield rose to 4.64% during New York session on Tuesday, hitting the highest level since late May.

Although yields fell back in late trading, they still rose throughout the day. Finally, the 10-year U.S. Treasury yield rose 2.8 basis points to 4.626%, and the 30-year U.S. Treasury yield rose 1.3 basis points to 5.131%.

Izaac Brook, interest rate strategist at Royal Bank of Canada Capital Markets, pointed out: "Today's market trends are essentially due to the continued rise in energy prices.

Yields have further exceeded the closely watched technical threshold - that is, the two-year yield has exceeded 4.20% and the 10-year yield has exceeded 4.60% - combined with the typical thin trading environment in the summer, together they have greatly amplified the volatility of the bond market." The latest pricing in the interest rate futures market shows traders see a roughly 22% chance of the Fed raising interest rates at next week's policy meeting.

Although this probability has declined from the "50/50" ratio earlier this month, the probability of a rate hike has increased slightly in the past few days as conflicts in the Middle East continue to escalate. It is worth noting that the recent sell-off in the U.S. bond market has erased the rebound that occurred after last week’s U.S.

CPI report was lower than expected. Global benchmark Brent crude has risen to about $91 a barrel as Iran-backed Houthi rebels in Yemen threaten Red Sea shipping. Christopher Hodge, chief U.S. economist at Natixis, said, "It is obvious that energy prices have been experiencing severe fluctuations.

Of course, the core basis for supporting the Federal Reserve's decision-making should be realized hard data, rather than just the overall CPI trend at the forecast level.

But even so, under the helm of a new leader, there is still great uncertainty in the Federal Reserve's final policy response mechanism." In the long-term bond world, some of the recent declines have actually been driven by higher so-called "real yields" after adjusting for inflation.

This not only reflects the market’s expectations for strong economic growth, but also reflects the sharp rise in capital costs driven by the sharp expansion of the U.S. government deficit and the investment boom in artificial intelligence.

On Tuesday, the yield on 30-year Treasury Inflation-Protected Securities (TIPS), an important benchmark for real yields, hit 2.95%, setting a new record since 2008. Volatility in the bond market was also exacerbated in part by lower-than-normal trading volumes.

According to CME Group's open interest data, trading volume in Secured Overnight Financing Rate (SOFR) futures and options on Monday was only 74% and 54% of the 20-day average, respectively. Judging from the 30-year U.S. Treasury yield, its 50-day moving average has now surpassed the key 5% mark, and the 100-day moving average will follow closely behind.

Some industry insiders are already worried that the 5.5% mark will be the next obvious target. Bond strategist Cameron Crise pointed out that long-term U.S. Treasury yields are at a critical point where 5% is established as a support level rather than a resistance level.

#Stocks #AI #Fed #Bonds #Oil

Full text

The alarm sounds! U.S. long-term bond yields hit two-month high

[Alarm sounds! U.S. long-term bond yields hit a two-month high] As the countdown to the Federal Reserve's July interest rate meeting enters a week, U.S. long-term Treasury bonds once again encountered selling pressure on Tuesday (July 21), pushing the 10-year and 30-year Treasury bond yields to a new high in about two months. The sharp surge in oil prices has heightened concerns about inflationary pressures, which in turn triggered panic about the possibility of the Federal Reserve raising interest rates.

As the countdown to the Federal Reserve's July interest rate meeting enters a week, long-term U.S. Treasury bonds once again encountered selling pressure on Tuesday (July 21), pushing the 10-year and 30-year Treasury bond yields to a new high in about two months. The sharp surge in oil prices has heightened concerns about inflationary pressures, which in turn triggered panic about the possibility of the Federal Reserve raising interest rates. Market data shows that the 10-year U.S. Treasury yield rose to 4.64% during New York session on Tuesday, hitting the highest level since late May. Although yields fell back in late trading, they still rose throughout the day. Finally, the 10-year U.S. Treasury yield rose 2.8 basis points to 4.626%, and the 30-year U.S. Treasury yield rose 1.3 basis points to 5.131%. Izaac Brook, interest rate strategist at Royal Bank of Canada Capital Markets, pointed out: "Today's market trends are essentially due to the continued rise in energy prices. Yields have further exceeded the closely watched technical threshold - that is, the two-year yield has exceeded 4.20% and the 10-year yield has exceeded 4.60% - combined with the typical thin trading environment in the summer, together they have greatly amplified the volatility of the bond market." The latest pricing in the interest rate futures market shows traders see a roughly 22% chance of the Fed raising interest rates at next week's policy meeting. Although this probability has declined from the "50/50" ratio earlier this month, the probability of a rate hike has increased slightly in the past few days as conflicts in the Middle East continue to escalate. It is worth noting that the recent sell-off in the U.S. bond market has erased the rebound that occurred after last week’s U.S. CPI report was lower than expected. Global benchmark Brent crude has risen to about $91 a barrel as Iran-backed Houthi rebels in Yemen threaten Red Sea shipping. Christopher Hodge, chief U.S. economist at Natixis, said, "It is obvious that energy prices have been experiencing severe fluctuations. Of course, the core basis for supporting the Federal Reserve's decision-making should be realized hard data, rather than just the overall CPI trend at the forecast level. But even so, under the helm of a new leader, there is still great uncertainty in the Federal Reserve's final policy response mechanism." In the long-term bond world, some of the recent declines have actually been driven by higher so-called "real yields" after adjusting for inflation. This not only reflects the market’s expectations for strong economic growth, but also reflects the sharp rise in capital costs driven by the sharp expansion of the U.S. government deficit and the investment boom in artificial intelligence. On Tuesday, the yield on 30-year Treasury Inflation-Protected Securities (TIPS), an important benchmark for real yields, hit 2.95%, setting a new record since 2008. Volatility in the bond market was also exacerbated in part by lower-than-normal trading volumes. According to CME Group's open interest data, trading volume in Secured Overnight Financing Rate (SOFR) futures and options on Monday was only 74% and 54% of the 20-day average, respectively. Judging from the 30-year U.S. Treasury yield, its 50-day moving average has now surpassed the key 5% mark, and the 100-day moving average will follow closely behind. Some industry insiders are already worried that the 5.5% mark will be the next obvious target. Bond strategist Cameron Crise pointed out that long-term U.S. Treasury yields are at a critical point where 5% is established as a support level rather than a resistance level.

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