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2026-05-23 10:13:35
[Short-Term US Treasury Yields Rise Against the Trend, Consumer Confidence Plunges to Rock Bottom] ⑴ Short-term US Treasury yields surged on Friday, with the two-year yield rising 4.4 basis points to 4.123%, as investors digested data showing a record low in May's US consumer confidence index. The five-year yield rose 1.3 basis points to 4.255%, while the benchmark 10-year yield fell 1.1 basis points to 4.557%. ⑵ A University of Michigan consumer survey showed that US consumer confidence plummeted to a record low in May, affected by soaring gasoline prices due to the war in Iran. High energy prices have exacerbated investors' inflation concerns and increased the likelihood that the Federal Reserve will maintain a hawkish monetary policy stance. The spread between the two-year and 10-year Treasury yields was last reported at 43.5 basis points. ⑶ A portfolio manager at Brandywine Global Investment Management stated that inflation has been above the Fed's target for five or six consecutive years, and even disregarding the war factor, the environment for Treasury yields is more severe, with the market believing the Fed's next move will be an interest rate hike. According to the FedWatch tool, investors currently expect a 66.6% probability of a Fed rate hike in December. (4) Following the swearing-in of Warsh, the new Fed chairman appointed by Trump, the future path of interest rates remains uncertain. Warsh stated he will lead a reform-oriented Fed, moving away from rigid frameworks and models. A senior fixed-income portfolio manager at SEI Investments believes Warsh will not attempt to change the Fed's long-standing independence, and the market expects policy continuity. The 30-year Treasury yield touched its highest level since July 2007 on Tuesday, before falling 3 basis points to 5.064% at the close.
