Treasury yields fall from multiyear highs — SkimNews
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- US Treasury yields fell from multiyear highs on Thursday, with the 10-year briefly breaching a level last seen in April 2002 before easing 5 basis points to 5.243%, and the 30-year hitting its highest level in 24 years before dropping more than 2 basis points to 5.613%.
- The Institute of International Finance warned that major economies face "persistently large deficits and rising interest expenses — challenges long associated with debt-distressed emerging market sovereigns," as government borrowing costs marched higher across developed markets.
- Japan's 10-year yield hit its highest level since the mid-1990s as the country's debt came under pressure from a weaker yen and Bank of Japan rate hikes.
- European yields climbed across the board: the German bund hit 3.6% (highest since 2008), France's 10-year jumped to 4.925%, Italy's rose to 4.706%, and the UK's climbed to 5.483%, with former Wells Fargo managing director Michael Schumacher flagging the UK for "very poor structural dynamics."
- Jeff Kilburg, CEO of KKM Financial, said the 10-year yield could pull back to 4.5%-4.75% if the US and Iran reach a deal to end the war, but warned continued conflict would be "problematic for the 10-year yield."
- Nomi Prins, founder of Prinsights Global, said sovereign wealth funds and central banks—main long-term Treasury holders—are unlikely to absorb supply and ease yields higher, but noted a Middle East resolution could push yields down.
- Brent crude futures climbed back above $100 a barrel on Thursday, continuing the oil-bond volatility link as the US-Israel war with Iran disrupted Middle East crude exports.
Why it matters: The 10-year Treasury influences rates on mortgages, auto loans, and credit card debt—so even after Thursday's pullback, yields near multi-decade highs directly raise household borrowing costs. Schumacher's flagging of the UK's "very poor structural dynamics," combined with the IIF's comparison of major economies to debt-distressed emerging markets, indicates the rate environment is tightening broadly, not just at the US long end.
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