US Treasury yields rise as 30-year bond hits 22-year high
US Treasury yields turned mixed on Friday as the long-end of the curve, the 20s and 30s, posted gains while the short-end and the belly of the yield curve retreated from multi-year high levels. The US 10-year Treasury yield holds firm at 5.20% after peaking at a 19-year high of 5.228%.
On Friday, US Treasury yields turned mixed, with long-term yields rising while shorter-term yields fell. The 10-year Treasury yield remained steady at 5.20%, holding near a 19-year high of 5.228%. However, the 30-year bond yield reached a 22-year high, indicating stronger demand for longer-dated bonds. Fed officials' hawkish statements and the recent 25-basis-point rate hike contributed to the yield increase.
Fed Governor Michael Barr suggested further rate hikes, bolstering the case for a 25-basis-point hike near the end of the year. Global yields are supported by high oil prices due to the ongoing US-Iran conflict, which keeps inflation elevated. US Consumer Sentiment fell, with inflation expectations rising from 4% to 4.6% and a five-year period from 3.3% to 3.4%.
Meanwhile, core capital goods increased in August, propelled by the AI investment boom. The 30-year bond yield hovered at 5.488%, after peaking at 5.5016%. Interest rates impact borrowing costs, savers' returns, and currency values. Higher rates typically strengthen a country's currency and can weaken gold prices, as gold becomes less attractive compared to interest-bearing assets.
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