02.09.202515:29:59UTC+00US 10-Year Yield Increases Further

On Tuesday, the yield on the 10-year US Treasury note increased to over 4.27%, experiencing a near 10 basis points rise over the past three sessions. This occurred despite growing expectations of a Federal Reserve rate cut this month, as fiscal concerns and the potential for sustained inflation exerted pressure on longer-dated bonds. The fixed-income market was inundated with a fresh wave of corporate bond issuances, raising alarms about the unsustainable rise in US debt following the expansionary fiscal measures implemented by Washington. As a result, the yield curve steepened considerably—short-term securities found support due to expectations of a rate cut, while longer maturities experienced sell-offs. Similar trends were observed in Europe, where fiscal apprehensions in the UK impacted Gilts, and there were uncertainties surrounding long-maturity selling by Dutch pension funds in addition to a record-setting bond issuance day across Europe. Regarding economic indicators, the prices paid component of the ISM Manufacturing PMI remained above 60, indicating significant inflationary pressures.