Treasury yields rise as U.S. threatens Iran with more economic sanctions
The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose 2 basis points to 4.661%.
On Friday, US Treasury yields surged as strength in oil prices spurred a rise in yields. This occurred despite weak retail sales, which fell -0.6% month-over-month, missing expectations of 0.1% growth. The decline was driven by a contraction in online sales, as Amazon delayed Prime Day from July to June. Gasoline prices also fell.
Meanwhile, the University of Michigan Consumer Sentiment index declined to 51.0 in August, reflecting waning consumer confidence, while inflation expectations remained steady. The 2-year Treasury note yield fell slightly, while the US Dollar Index dropped over 0.31% to 99.63. Markets anticipate a 63% chance of a Federal Reserve rate hike at the December 2026 meeting.
The upcoming economic data from the US will include housing data, ADP employment figures, jobless claims, and flash PMIs. Central banks set base lending rates to maintain price stability, typically around a 2% core inflation rate. In this context, higher interest rates can strengthen a country's currency and weigh on the price of gold, as gold becomes less attractive compared to interest-bearing assets.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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