10-Year Yield Flat at 4.645% After July Retail Sales Miss
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- 10-year Treasury yield rose less than 1 basis point to 4.645% after July retail sales fell 0.6%, well below the 0.1% rise economists polled by Dow Jones had forecast.
- 2-year Treasury yield fell more than 2 basis points to 4.117% on cooling inflation signals, while the 30-year yield climbed more than 2 basis points to 5.232%, steepening the curve.
- July producer price index came in flat month-over-month, undershooting the 0.2% gain economists expected, following Thursday's CPI print that matched forecasts.
- Treasury Secretary Scott Bessent warned on Newsmax of new "economic isolation" measures against Iran that "have never been seen," pushing yields higher earlier in Friday's session.
- Defense Secretary Pete Hegseth told reporters U.S. forces could maintain an indefinite naval blockade of Iranian ports, adding a geopolitical premium to the long end.
- ING strategists wrote that contained U.S. inflation this week "eases higher rates pressure" but real yields "will likely remain" elevated, underscoring uncertainty over the Fed's path.
Why it matters: The curve steepened as short-end yields fell on softer inflation prints — flat PPI and in-line CPI — while the 30-year advanced on a day Bessent warned of unprecedented Iran isolation measures and Hegseth said the naval blockade could continue "indefinitely." ING noted contained inflation eases rate pressure but real yields remain elevated, leaving the Fed's rate path ambiguous despite this week's data.
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