US Treasury yields were on the rise for a third consecutive session on Tuesday as concerns about the US-Iran conflict and inflation combined with a global bond selloff, pushing long-term borrowing costs toward their highest levels in decades, Reuters reported.
The US 30-year Treasury yield edged up to its highest level since 2007, while the benchmark 10-year yield, which has risen since the Iran conflict began, approached its highest point since early 2025.
Will Compernolle, a macro strategist at FHN Financial in Chicago, said that the US yields were probably moving higher partly because light summer trading volumes, limited economic data and the absence of public comments from US central bank policymakers left Middle East tensions driving market direction. He added that the breakdown of the MOU reached by Washington and Tehran in June suggested the energy shock would persist.
"I think that's weighing on bonds because we're living in this world where we're going to have supply shock after supply shock," said Compernolle, adding that fixed income was also competing for capital with surging expenditures on artificial intelligence.
Meanwhile, the Federal Reserve said growth in US industrial production slowed by a tenth of a percentage point to 0.2% in July, falling short of economists’ expectations partly because of weaker consumer-goods production.
The benchmark US 10-year Treasury note yield was last up 2 basis points at 4.744%, while the 30-year bond yield increased 1.3 basis points to 5.323%.
A closely monitored section of the US Treasury yield curve, which measures the difference between two- and 10-year Treasury yields and is viewed as an indicator of economic expectations, stood at a positive 54.4 basis points.
The two-year US Treasury yield, which generally tracks expectations for Federal Reserve interest rates, gained 1.6 basis points to 4.198%.
The breakeven rate on five-year US Treasury Inflation-Protected Securities was last at 2.268%, after closing at 2.253% on August 17.
The 10-year TIPS breakeven rate was last at 2.297%, suggesting the market expects inflation to average about 2.3% annually over the next decade.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
