Rising crude prices and upcoming CPI data push 10-year yields to 4.705% amid Fed rate cut expectations.
US Treasury yields climbed on Monday as surging oil prices reignited inflation fears ahead of key economic data. The 10-year benchmark note rose nearly six basis points to 4.705%, while WTI crude soared 6.70% to $82.29 amid geopolitical tensions in the Strait of Hormuz.
Traders are bracing for July’s CPI report, expected to show a slight dip in headline inflation to 3.4% YoY from 3.5%. Core CPI is projected to ease to 2.5% from 2.6%. The data follows a weaker-than-expected jobs report, where 23K jobs were cut and prior months revised downward by 100K.
Markets now price a 65% chance of the Fed holding rates steady in September, with a 35% probability of a 26-basis-point hike. The US Dollar Index (DXY) remained under pressure as investors trimmed hawkish bets.