Yields on 10-year U.S. Treasury bonds have returned to their January 2025 highs

Following Fed Chair Kevin Warsh’s remarks in Jackson Hole—which the markets interpreted as a “hawkish” signal—and amid continued rises in oil prices, the yield on 10-year U.S. Treasury yields exceeded 4.75% on August 31 for the first time since January 2025, Bloomberg noted. Rising oil prices have reinforced expectations of a Fed rate hike, the agency reports.

The sell-off in the bond market has also affected other long-term government bonds, according to Bloomberg. For example, the yield on five-year government bonds reached its highest level since the beginning of last year—4.5%—Bloomberg reports. The yield on 30-year Treasuries, although it rose by five basis points on Monday to around 5.26%, remains well below its multi-year highs reached in mid-August.

The sell-off that has swept the government bond market in recent days continued on August 31 after oil prices jumped more than 3% on Monday—the U.S. struck Iranian targets for the first time in more than a month. At the time of publication, Brent contracts are trading around $91 per barrel, while WTI futures for next month’s delivery are priced at around $86.

Investors are grappling with growing concerns about U.S. government debt and assessing how aggressively the Fed will have to raise rates to combat inflation, Bloomberg notes.

Last Friday, yields on short-term bonds rose sharply (the yield on two-year Treasuries jumped to 4.33%, a rise of 10 basis points—the largest jump since June 17). The markets reacted to a speech by Fed Chairman Kevin Warsh at a symposium in Jackson Hole, where he pledged to rein in inflation, which has exceeded the central bank’s target for the past five years.

This article is being updated

This article was AI-translated and verified by a human editor