LIVE MARKETS-Benchmark Treasury yield breakout holds as Fed clouds rate outlook
Reuters2026/07/30 13:05Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
BENCHMARK TREASURY YIELD BREAKOUT HOLDS AS FED CLOUDS RATE OUTLOOK
U.S. Treasury yields continued their climb Thursday, with the 30-year yield hitting its highest level in 19 years as investors parsed comments from Federal Reserve Chair Kevin Warsh. His remarks added uncertainty to the Fed's policy outlook, helping push long-dated Treasury yields higher as investors reassessed the path of rates and inflation.
Wednesday's Fed meeting left investors with little clarity. Policymakers left interest rates unchanged, but the decision was far from unanimous, with three members of the Federal Open Market Committee voting for an immediate rate hike. That split left markets searching for direction, raising concerns that mixed signals from the central bank could fuel volatility across stocks and bonds.
Meanwhile, June PCE inflation largely matched expectations, advance second-quarter GDP growth missed forecasts, and weekly jobless claims came in lower than expected.
Against that backdrop, the benchmark 10-year Treasury yield US10YT=RR is up around 6 basis points to 4.68%. Last week, it hit 4.7135%, its highest level since January 2025.
From a technical standpoint, the advance continues to validate the recent breakout from a long-term symmetrical triangle pattern.
Supporting that view, the monthly Bollinger BandWidth indicator is on track to rise for a third straight month after falling to its lowest level since May 1989 at the end of May, suggesting volatility is expanding from unusually compressed levels.
The next upside hurdles are the April 2024 high of 4.739% and the January 2025 peak of 4.809%. If those levels give way, attention could shift to the October 2023 high of 5.021%. The upper yearly Bollinger Band, near 5.00%, sits close to that mark. For broader historical context, the January 2007 high stands at 5.333%.
On the downside, initial support is seen around 4.582%. For the breakout to begin losing credibility, yields would likely need to fall below the former triangle resistance near 4.54%.
For now, the broader technical picture remains constructive. As long as the 10-year yield holds above its 20-month moving average, just under 4.30%, the longer-term bullish trend remains intact.
(Terence Gabriel)
*****
EARLIER ON LIVE MARKETS:
BRITISH MARKETS BETTER PLACED FOR AI BUST THAN DOTCOM CRASH CLICK HERE
TECH CORRECTION MAY BE LOSING STEAM IN JAPAN, SAYS CITI CLICK HERE
STOXX PUSHING HIGHER CLICK HERE
EUROPE BEFORE THE BELL: PLENTY TO ASSESS CLICK HERE
BOND MARKETS DOING THE FED'S WORK CLICK HERE
(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Oil prices are Trump’s “big trouble,” while the yen is everyone’s problem
Oil prices are approaching $110 per barrel, with only seven and a half weeks left before the midterm elections, and the probability of the Democratic Party regaining the Senate has surpassed 50%. Political and economic pressures are forcing the White House to seek relief. Meanwhile, the structural appreciation of the yen poses an even deeper global risk—the correction in the U.S.-Japan interest rate differential, large-scale Japanese capital repatriation, and the forced unwinding of carry trades are all likely to simultaneously push up European and American bond yields and awaken the VIX. A cross-asset volatility storm may already be brewing.
Wintermute’s Aggressive Liquidations Trigger Panic: 5 Cryptos Worth Risking Before Buyers Return to the Market
Once the Federal Reserve starts the rate hike cycle, is "three consecutive hikes" a reasonable expectation?
BMO expects consecutive rate hikes in October and December, with a total of three increases potentially wiping out all rate cut gains for 2025. Vanguard believes "three consecutive hikes" is a reasonable starting point, but the actual number could be as high as six. There are historical exceptions: in 1997, the Federal Reserve raised rates only once and took no further action for the following 18 months. Meanwhile, trillion-dollar debt financing by AI giants, private credit exposure in the insurance industry, and the 10-year U.S. Treasury yield approaching 5% are the most dangerous pressure points in this rate hike cycle.
Goldman Sachs Also Changes Its Tune: The Fed Will Raise Interest Rates Next Week!
Goldman Sachs has shifted from predicting a rate hold to betting on a 25 basis point hike next week, stating that this change is not due to particularly bad inflation data—the August CPI was not perfect, but it wasn’t alarming either. The real key is that hawkish comments from Waller have already shaped market expectations: "If the inflation data isn’t perfect, there will be a rate hike." If the Federal Reserve backs down now, its credibility will suffer a serious blow and long-term interest rates could react sharply and immediately.
Crypto prices
More
