Treasury yields fall as oil recedes before Fed policy decision
TLT•Benchmark yields and Fed expectations
The yield on the benchmark U.S. 10-year Treasury note US10YT=RR fell 2.5 basis points to 4.616% after hitting a one-week low of 4.614%. The yield has fallen about 9 basis points over the past three sessions.
"With lower oil, less forward inflationary pressure, so then that helps rates back off a bit," said JoAnne Bianco, partner and senior investment strategist at BondBloxx Investment Management in Chicago.
"From the perspective of disruption in oil supplies or much higher sustained oil prices, that's associated with the resumption of the conflict," said Bianco, but an alleviation of the conflict will cause oil prices to ease.
The yield on the 30-year bond US30YT=RR shed 1.4 basis points to 5.111% and was also on track for a third straight drop, which would mark its longest run of declines since mid-June.
Even with the recent drops, yields on 10-year and 30-year bonds are poised for their biggest monthly increase since March, the first full month of the Iran war, as the turn higher in oil prices pushed up expectations for rate hikes from the Fed. The 2-year yield US2YT=RR is on pace for a fifth straight monthly rise, its longest since a nine-month climb that ended in April 2022.
