Yields on 30-year U.S. Treasury bonds hit a 19-year high
On August 17, the yield on 30-year U.S. Treasury bonds rose by more than 4 basis points to 5.311%, the highest level since June 2007. Investors are awaiting the release of the minutes from the July meeting of the Federal Open Market Committee (FOMC), scheduled for Wednesday, according to CNBC.
The yield on 10-year U.S. Treasury bonds, which the publication calls the main benchmark for mortgage, auto loan, and credit card rates, rose by more than 2 basis points to 4.724%. The yield on 2-year Treasury bonds, which are sensitive to the Federal Reserve’s short-term rate decisions, rose by more than 1 basis point to 4.182%.
One basis point equals 0.01 percentage points. Bond prices and their yields move in opposite directions.
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Market participants expect the minutes from the July FOMC meeting to provide additional signals regarding the Federal Reserve’s latest monetary policy decisions and the possible future trajectory of interest rates. On July 29, the Fed left its target rate range unchanged for the fifth consecutive time—at 3.50–3.75%. Nine committee members supported the decision, while Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lori Logan of Dallas advocated for a 25-basis-point rate hike.
Last Friday, bond yields also rose after U.S. retail sales unexpectedly fell by 0.6% for the month. This followed a flat monthly reading for the Producer Price Index in July.
