- 10-year and 30-year US Treasury yields have reached 24-year highs in recent days.
- The Fed lifted rates last month for the first time in three years, and Fed officials signaled more increases before year-end.
- Fed funds futures price an over 82% likelihood of a December rate hike, per CME FedWatch.
- Zervos, a counselor to Treasury Secretary Scott Bessent, said real yields are high by historic standards and should fall once the energy shock from the US war with Iran resolves.
- Brent crude has risen about 38% between the start of the conflict and Wednesday.
- Zervos said the rise in yields is not US-specific, citing Germany, France, Italy and Japan as seeing similar moves.
- Demand for mortgages and other consumer loans has dropped as borrowing costs rose with Treasury yields.
Quotes
“These real yields are really, really high by any historic standard, so I think we have some room to come down in the future”
“We're just going to have to live with that for a short period of time”
“It's not a U.S. problem.”