Monday saw long-term Treasury yields reach multiyear highs, with the US 10-year yield surging by more than 10bps to 4.54%, its highest level since October 2007. The 30-year yield also rose significantly, climbing as much as 13.6 basis points to 4.66%, a level not seen since April 2011.
This surge in yields swiftly followed signals from the Fed, indicating that it may raise rates once more this year and reduced expectations for rate cuts in 2024, maintaining tight monetary policy.
The recent selloff in bonds has primarily affected longer-dated securities.
With a closely monitored segment of the U.S. Treasury yield curve, which measures the difference between yields on two and 10 year Treasuries and serves as an economic expectation indicator, stood at a negative 59.1 basis points, marking its steepest decline in four months.
The yield curve is going to start pricing in a recession. This suggests a significant shift in market sentiment/expectations over the past few months.
Great Post, Thanks for the insights!