U.S. Treasury yields surged Friday as oil prices rose and Federal Reserve officials signaled potential autumn rate hikes.
U.S. Treasury yields rose significantly on Friday, driven by rising oil prices and signals from Federal Reserve officials that interest rates may be hiked in the autumn. The benchmark 10-year Treasury note yield jumped nearly 7 basis points to 4.731%, while the 2-year and 30-year yields also saw substantial gains. Beth Hammack of the Cleveland Fed and Neel Kashkari of the Minneapolis Fed both expressed support for raising rates now to combat inflation. Hammack stated that acting now is necessary to achieve the 2 percent inflation objective, while Kashkari suggested that small, incremental hikes are preferable to waiting for larger, bolder moves later. The rise in yields was further influenced by a positive shift in oil prices, which increased after Iran attacked two tankers in the Strait of Hormuz. Meanwhile, consumer sentiment improved slightly in the user-reported July data, and GDP growth slowed to 1.5% in the second quarter, missing expectations.