Bond Market Update

Losses Widened

• U.S. Treasuries have faced some more selling, sending the 5-yr yield past its July high to a level not seen since early 2025 while the 2-yr yield is now within three basis points of its July peak. Treasuries briefly climbed off their lows as Fed Chairman Warsh wrapped up his speech from the Jackson Hole Symposium, but it was not long before selling pressure built once again, sending the complex to fresh lows. The selling has taken place without an increase in the price of oil. However, the market's expectations for a September rate hike have strengthened with the fed funds futures market pointing to a 60% chance of a rate hike on September 16, up from yesterday's projection around 40%. Equities have slid to lows with the S&P 500 (-0.1%) trimming this week's gain to 0.6%.
• Yield Check:
  • 2-yr: +11 bps to 4.34%
  • 3-yr: +10 bps to 4.40%
  • 5-yr: +9 bps to 4.48%
  • 10-yr: +5 bps to 4.72%
  • 30-yr: +2 bps to 5.21%