Yields Bubble

Yields Bubble

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  • On Wednesday, US Treasury yields saw an upward trend as investors digested economic data showcasing persistent inflationary pressures within the United States, a response also influenced by the release of Federal Reserve meeting minutes. The yield on two-year Treasury bonds experienced a minor uptick, reaching 4.969%, while the yield on 10-year bonds climbed to 4.264%. Notably, the latter had reached 4.278% during trading, marking its highest point since 2007.

  • Meanwhile, the yield on 30-year Treasury bonds registered an increase of around 4 basis points, settling at 4.357%. This yield had briefly reached 4.379% during the trading session, marking its peak since October 25, 2022. Concurrently, the dollar index, a gauge of the US currency's performance against a basket of six major currencies, exhibited a 0.25% rise, reaching 103.47 points. It briefly reached 103.53 points during trading, marking its highest level in a span of two months.

Why it matters

Fed officials expressed concern at their latest meeting about the pace of inflation and said more interest rate hikes may be needed in the future unless conditions change, minutes of the latest meeting showed. The Federal Reserve data showed that industrial production grew by 1% in July on a monthly basis, which exceeds double expectations for a growth of 0.3%, after it contracted during the previous month by a revised rate of 0.8%.


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