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Short-end Treasury yields tick up as oil drifts lower

The move was linked to shifts in the shortest end of the curve and possible Fed rate expectations, with Friday’s thin liquidity making it more pronounced.

Reported · Written up by our desk · Economy

Mortgage News Daily reports that for much of the week, oil prices and Treasury yields moved in tandem, but Friday afternoon broke that pattern.

The outlet said oil kept trading sideways to slightly lower while Treasury yields rose modestly, though it characterized the overall damage as negligible.

It attributed the change to activity concentrated in the shortest maturity part of the curve and, by extension, to Fed rate expectations.

Mortgage News Daily also pointed to potential drivers such as dealer positioning ahead of next week’s inflation reports and Warsh testimony, adding that Friday’s illiquidity likely amplified the size of the move.

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