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 bolder actions later. The surge in yields was further influenced by a positive shift in energy prices, with West Texas Intermediate futures rising 2.2% to $85.41 per barrel following an attack on tankers in the Strait of Hormuz. Additionally, consumer sentiment improved slightly in July as inflation fears eased, even as GDP growth slowed to 1.5% in the second quarter.