10-Year Treasury Yield Softens from 24-Year High
The yield on the 10-year US Treasury note was at 5.27% on Tuesday, pausing a surge that peaked at a 24-year high of 5.33% touched yesterday, tracking the momentary dip in wholesale fuel prices. Oil bids were tamed by signs that some laden tankers passed through the Strait of Hormuz. The 10-year yield has surged over 110bps this year as risks of higher rates from the Federal Reserve, soaring federal deficit spending, and increasing corporate debt supply triggered a plunge in demand for duration. The price gauge in the ISM Services PMI surged to a four-year high, consolidating expectations that the Fed will deliver another rate hike this year. Meanwhile, a widening budget deficit raised the outlook for the supply of Treasury securities despite the Treasury's preference to service its increasing debt with coupon-less bills. The latest figures from the CBO showed net public debt rising from 101% of GDP this year to over 175% by 2056, assuming a 10-year yield below 4.5%.
33% touched yesterday, tracking the momentary dip in wholesale fuel prices. Oil bids were tamed by signs that some laden tankers passed through the Strait of Hormuz. The 10-year yield has surged over 110bps this year as risks of higher rates from the Federal Reserve, soaring federal deficit spending, and increasing corporate debt supply triggered a plunge in demand for duration. The price gauge in the ISM Services PMI surged to a four-year high, consolidating expectations that the Fed will deliver another rate hike this year.
Meanwhile, a widening budget deficit raised the outlook for the supply of Treasury securities despite the Treasury's preference to service its increasing debt with coupon-less bills. 5%.