| Wednesday, August 13, 2025 |
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 08/06/25 | 4.36 | 4.24 | 4.12 | 3.90 | 3.72 | 3.67 | 3.78 | 3.98 | 4.23 | 4.80 | 4.82 |
| 08/07/25 | 4.34 | 4.24 | 4.11 | 3.91 | 3.73 | 3.69 | 3.79 | 3.99 | 4.25 | 4.80 | 4.83 |
| 08/08/25 | 4.33 | 4.24 | 4.12 | 3.93 | 3.76 | 3.73 | 3.83 | 4.03 | 4.28 | 4.83 | 4.85 |
| 08/11/25 | 4.34 | 4.24 | 4.12 | 3.94 | 3.77 | 3.74 | 3.84 | 4.04 | 4.29 | 4.83 | 4.85 |
| 08/12/25 | 4.30 | 4.22 | 4.08 | 3.90 | 3.73 | 3.71 | 3.82 | 4.03 | 4.30 | 4.85 | 4.88 |
The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is always subject to change. This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P. As of: close of business 08/12/2025.
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The bond market reacted to the Consumer Price Index (CPI) news released on Tuesday with a mix of relief and cautious optimism. The CPI data showed a 2.7% annual increase in consumer prices for July, slightly below economists' forecasts of 2.8%, while core inflation rose to 3.1%, its highest level since February. This inflation reading eased fears that tariffs were causing runaway price increases, which had previously stoked concerns about persistent inflation and complicated the Federal Reserve's rate cut plans. As a result, Treasury yields experienced moderate declines, signaling increased investor confidence that inflation was somewhat contained and that the Fed would be more likely to implement rate cuts later in the year.
Short-term Treasury yields fell moderately, with the benchmark 10-year yield dropping about 4 basis points to around 4.27% and the 2-year yield also declining slightly. This was driven by expectations that the Fed would proceed with interest rate reductions, potentially beginning with a cut in September. Money market pricing after the CPI release indicated traders expected roughly 57 basis points of Fed cuts by the end of 2025. These moves showed relief after recent weak jobs data and concerns about stagflation, suggesting investors saw the inflation report as supporting a softer monetary policy stance rather than a need for tightening.
However, the rise in core inflation to 3.1% remains a source of caution. Market participants noted that tariff-driven inflationary pressures might become more pronounced as inventory buffers diminish, possibly complicating future rate cut decisions. Thus, while the current CPI results allowed the bond market to rally on rate cut hopes, uncertainty remains over the durability of inflationary risks linked to tariffs and supply chain dynamics. This balance led to a nuanced market response, with some yield increases in longer-dated Treasuries amid concerns over an expanding U.S. debt supply and broader fiscal uncertainties.
Overall, the CPI release brought a dose of reassurance to the bond market by coming in slightly below expectations, supporting bets on upcoming rate cuts. Yet, underlying inflation trends, especially related to tariffs and core price rises, introduced an element of caution. The market's reaction underscored the delicate interplay between inflation data, Fed expectations, and geopolitical factors shaping the U.S. bond market's outlook.
Recently, rates have bounced all around, but from 2yrs and longer, yields are higher today than they were a year ago. That seems a gift to grab as we stand at the doorway to rate cuts. Simple, safe, boring bonds are the buy of the day. By December there’s a better than even chance yields will be materially lower. Call your CCB Capital Markets rep for assistance and get the good stuff now!
Short-term Treasury yields fell moderately, with the benchmark 10-year yield dropping about 4 basis points to around 4.27% and the 2-year yield also declining slightly. This was driven by expectations that the Fed would proceed with interest rate reductions, potentially beginning with a cut in September. Money market pricing after the CPI release indicated traders expected roughly 57 basis points of Fed cuts by the end of 2025. These moves showed relief after recent weak jobs data and concerns about stagflation, suggesting investors saw the inflation report as supporting a softer monetary policy stance rather than a need for tightening.
However, the rise in core inflation to 3.1% remains a source of caution. Market participants noted that tariff-driven inflationary pressures might become more pronounced as inventory buffers diminish, possibly complicating future rate cut decisions. Thus, while the current CPI results allowed the bond market to rally on rate cut hopes, uncertainty remains over the durability of inflationary risks linked to tariffs and supply chain dynamics. This balance led to a nuanced market response, with some yield increases in longer-dated Treasuries amid concerns over an expanding U.S. debt supply and broader fiscal uncertainties.
Overall, the CPI release brought a dose of reassurance to the bond market by coming in slightly below expectations, supporting bets on upcoming rate cuts. Yet, underlying inflation trends, especially related to tariffs and core price rises, introduced an element of caution. The market's reaction underscored the delicate interplay between inflation data, Fed expectations, and geopolitical factors shaping the U.S. bond market's outlook.
Recently, rates have bounced all around, but from 2yrs and longer, yields are higher today than they were a year ago. That seems a gift to grab as we stand at the doorway to rate cuts. Simple, safe, boring bonds are the buy of the day. By December there’s a better than even chance yields will be materially lower. Call your CCB Capital Markets rep for assistance and get the good stuff now!
This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.
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