05-10-2021
Sydney Maki
[Bloomberg] - U.S. Treasury yields have soared and energy prices have raised concerns about inflation.
The benchmark 10-year Treasury bond yield climbed nearly 6 basis points to 1.536%, the highest level since September 30. The 30-year Treasury bond yield is less than a basis point from last week's high.
Inflation-protected Treasury bonds outperformed the broader market, and the yield gap with ordinary Treasury bonds widened. The 10-year breakeven inflation rate rose to 2.449%, the highest since early June. Crude oil and natural gas futures prices have reached a seven-year high.
After the Federal Reserve stated that the reduction in asset purchases might begin in November at the earliest, last month, the U.S. Treasury bond had its biggest monthly decline since March. The yield on British government bonds has soared due to rising inflation and forecasts that the Bank of England will raise interest rates.
Priya Misra, head of global interest rate strategy at TD Securities in New York, said, “In the long run, I think the trend in yields since the Fed’s September 22 meeting shows that the market is digesting the Fed’s withdrawal from the stimulus policy. Today’s market is performing more. It is related to the break-even inflation rate, so the energy crisis is also reflected in the yield curve."
