Overview
- U.S. government bond yields climbed Friday, with the 10‑year at about 4.54% and the 30‑year above 5.08%, as investors reassessed the path for rates under incoming Federal Reserve Chair Kevin Warsh.
- Following Tuesday’s consumer price report showing 3.8% inflation year over year and Wednesday’s producer price jump to 6%, markets moved to price out near‑term cuts as oil held above $100 a barrel.
- Federal Reserve voices diverged this week, as Boston Fed President Susan Collins on Wednesday said further hikes could be needed if inflation persists, while New York Fed President John Williams on Thursday saw no reason to change policy now.
- In Europe, a Reuters poll published Wednesday found most economists expect the European Central Bank to raise rates in June, echoing Bundesbank chief Joachim Nagel’s Tuesday warning that hikes are becoming more likely.
- Higher long‑term yields raise mortgage and business borrowing costs, and the squeeze traces back to supply risks through the Strait of Hormuz, where reduced tanker flows keep energy prices elevated and complicate central bank choices.