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US 2-year yields hit highest since February 2025
The two-year note yield reached 4.24% overnight, with CPI due Tuesday and oil-related risks in focus for the bond outlook.
US 2-year Treasury yields rose to 4.24% overnight, the highest level since February 2025, underscoring continued market unease even after multiple Fed rate cuts over the past year. The Fed lowered rates in September, October and December, but the fed funds target range remains at 3.50% to 3.75%, according to Forexlive.
Forexlive reported that BMO rates strategist Ian Lyngen said investors are wary of a July surprise amid uncertainty tied to Warsh's lack of guidance. Ahead of the next data point, the CPI report on Tuesday is expected to show core inflation rising 0.2% month over month and 2.8% year over year, while headline CPI is expected to fall to 3.8% from 4.2% year over year.
The bond move also reflects energy and inflation dynamics, Forexlive said. The report points to renewed re engagement in Iran that could undo hopes for lower oil prices, and it notes that tight refining markets have kept fuel prices elevated despite declines in crude.
Forexlive added that 2-year yields may face pressure later in the month, with the market described as sitting near a technical breakout level that could challenge the 2025 high of 4.40%.
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