U.S. Treasury yields eased Friday following a sharp climb the previous day that pushed the benchmark 10-year note to its highest level since mid-January 2025, as investors weighed inflation concerns tied to rising oil prices and escalating geopolitical tensions.
The 10-year Treasury yield, which serves as a critical benchmark for mortgage rates, auto loans, and credit card debt, fell more than 3 basis points to 4.667%. On Thursday, it had briefly climbed above 4.7%, marking the highest level since January 15, 2025, just before President Donald Trump began his second term.
The 2-year Treasury yield, which tends to track Federal Reserve interest rate policy more closely, declined more than 3 basis points to 4.324%. The 30-year bond yield dropped more than 2 basis points to 5.146%. One basis point equals 0.01%, and bond yields move inversely to prices.
Economic Data Disappoints
Yields remained lower after the release of the S&P Global Flash U.S. purchasing managers index, which measures economic health in the manufacturing and services sectors. The July reading came in at 53.8, falling short of the 54.4 forecast by economists polled by Dow Jones. The weaker-than-expected data suggested economic activity may be cooling more than anticipated.
In a separate report Thursday, jobless claims for the week ended July 18 totaled 187,000, coming in well below the 212,000 economists had expected. The lower-than-forecast figure pointed to continued strength in the labor market despite signs of broader economic softening.
Middle East Tensions Escalate
Market sentiment has been heavily influenced by rising tensions in the Middle East, which pushed Brent crude oil prices above $100 per barrel and revived concerns about inflation. President Trump told Axios on Thursday that he is considering launching a “massive attack” on Iran as the conflict extends into the Red Sea region.
Trump described the potential strikes as larger than any action seen in the war thus far, adding that Iran has not “received enough pain yet.” He indicated a decision is imminent, telling the outlet, “I am close to making a decision. We are all set for it.”
U.S. Central Command has conducted strikes on Iranian targets for 13 consecutive nights as of Thursday evening, intensifying military operations in the region.
The combination of elevated oil prices and geopolitical uncertainty has complicated the Federal Reserve’s inflation outlook, contributing to volatility in Treasury markets. Higher energy costs could put upward pressure on consumer prices, potentially influencing the central bank’s interest rate decisions in the coming months.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/24/treasury-yields-bonds-us-debt.html
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