Treasury Yields Ease From Multi-Decade Highs as Oil Weakens

Original summary · What happened

United States government bond yields retreated from their highest levels since 2002 on Tuesday as energy commodities dropped. The 10-year Treasury yield declined by roughly five basis points to around 5.256% after reaching multi-decade peaks during the preceding session. Similarly, the 30-year Treasury yield slipped more than three basis points to approximately 5.625%, while two-year note yields dropped over four basis points to reach 4.787%.

The decline in sovereign debt yields coincided with lower oil prices, with Brent crude falling 2% near $98 per barrel and West Texas Intermediate sliding to roughly $87 per barrel. Fixed-income markets had experienced heavy selling on Monday following Institute for Supply Management data showing services PMI at 54.9 alongside a rise in the prices sub-index to 74. Current market pricing reflected an approximate 78% likelihood of the Federal Reserve maintaining policy rates unchanged at its upcoming meeting.