Longer-dated U.S. Treasury yields remain elevated as geopolitical risks and inflation concerns offset softer economic data.
U.S. Treasury yields retreated modestly Tuesday but stayed near multi-year peaks, with the 30-year yield briefly touching its highest level since 2007. The 30-year bond yield fell 2.32 basis points to 5.2868%, while the 10-year note yield declined 1.6 basis points to 4.708% after hitting 4.7478%, the highest since January 2020.
Rising oil prices and escalating Middle East tensions fueled inflation fears, countering recent soft U.S. economic data that had eased expectations for an imminent Federal Reserve rate hike. Traders now assign a 35% chance of a September hike but see 68% odds for December. Crude prices climbed for a third session, with U.S. crude up 0.82% to $85.17 and Brent rising 0.55% to $91.37.
The yield surge reflects concerns over persistent inflation and fiscal pressures, despite cooling economic indicators. Market focus remains on geopolitical developments and their potential impact on energy markets and monetary policy.