Treasury Yields Resume Climb as Inflation Fears Return

U.S. Treasury yields picked up again on Thursday, CNBC reported, as persistent inflation concerns pulled borrowing costs back toward recent multi-decade highs after a brief mid-week retreat.

Yields Rise Across the Curve

The benchmark 10-year Treasury note yield climbed more than 3 basis points in early trading. It touched 4.6014%, a level closely watched by mortgage, auto loan, and credit card markets. The 2-year note, which tracks near-term Fed expectations most closely, also rose more than 3 basis points to 4.0746%. The 30-year bond, often viewed as a gauge of longer-run political and fiscal risk, edged just over 1 basis point higher to 5.1334%. One basis point equals 0.01%, and bond prices fall as yields rise.

Also Read: What Rising Treasury Yields Mean for Mortgage Rates

A Short-Lived Reprieve on Wednesday

Thursday’s move reversed a notable pullback from the session before. The 10-year yield had dropped more than 9 basis points on Wednesday. The 30-year fell more than 6 basis points. That cooling came as traders digested minutes from the late-April Federal Open Market Committee meeting. Those minutes revealed that most Fed officials expect they may need to raise rates further if the ongoing Iran conflict drives energy-led inflation meaningfully higher.

Also Read: Fed Minutes Signal Rate-Hike Readiness if Iran War Lifts Inflation

Oil Adds to Inflation Pressure

Crude prices climbed alongside yields on Thursday. West Texas Intermediate futures for July delivery rose roughly 1.4% to approach $99.61 per barrel. Brent crude, the international benchmark, gained around 1.3% to $106.42. Ongoing disruption to shipping lanes and regional energy supply chains, tied to Middle East hostilities, continues to keep a floor under oil markets. Elevated crude costs feed directly into broader consumer price expectations, complicating the Fed’s path forward.

Housing Data Awaited

Markets are also watching a batch of U.S. housing figures due later Thursday from the Census Bureau. April housing starts are forecast by consensus at roughly 1.41 million units, down from 1.502 million in March. Building permit estimates sit at 1.39 million, modestly above March’s reading of 1.363 million. Weaker starts data could signal that higher borrowing costs are already cooling residential construction activity.

Read Next: Fed Officials Flag Inflation Risk as Iran Conflict Clouds Rate Outlook