10-Year Yield Tops 4.7% as $100 Oil Stokes Inflation Fears
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- 10-year U.S. Treasury yield rose above 4.7% — last seen at 4.699%, up more than 4 basis points — hitting its highest level since Jan. 15, 2025, the article notes, before the start of President Donald Trump's second term
- Brent crude jumped 7% to $100.69 a barrel, on pace for its third-largest monthly gain in the past 10 years, while WTI gained 6% to $92.19; the move followed Houthi rebel attacks on tankers off Saudi Arabia's Red Sea coast and renewed U.S. threats to escalate strikes against Iran
- Fed funds futures traders now price an 80%+ probability of a rate hike at the September meeting per CME FedWatch, a sharp jump from 52% just one week earlier
- 2-year Treasury yield rose more than 5 basis points to 4.353% and the 30-year climbed 2 bps to 5.167%, with government bond yields also moving higher across Asia and Europe
- Weekly jobless claims for the week ended July 18 came in at 187,000 — well below the 212,000 economists polled by Dow Jones expected
- UK 10-year gilt climbed above 5.1% after new Prime Minister Andy Burnham announced a 20% cut to business rates on hospitality venues, a move the article says will cost roughly £100 million ($134 million)
- Chris Rupkey, FWDBONDS chief economist, warned that escalating Middle East conflict could cause "a u-turn in energy prices virtually overnight," complicating the Fed's inflation-versus-jobs calculus
Why it matters: The odds of a Fed rate hike at the September meeting jumped from 52% to over 80% in a single week per CME FedWatch, reflecting surging inflation concerns. With oil above $100 and the 30-year Treasury at 5.167%, borrowing costs on mortgages, auto loans, and credit cards are all resetting higher for consumers.
