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2026-07-13 21:20:11
[US Treasury Yields Surge Near Key Resistance; Inflation Data and Congressional Hearings Set the Tone for Interest Rate Path] ⑴ Geopolitical risks in the Middle East escalated again, with weekend clashes between the US and Iran pushing oil prices up by about 4% in a single day. Renewed concerns about energy supply fueled inflation worries, leading to a broad rise in US Treasury yields. ⑵ The yield on the two-year US Treasury note, most sensitive to policy, rose to 4.231%, briefly touching 4.24%, a new high in over 16 months since February 2025, further increasing from 4.208% last Friday. ⑶ The yield on the ten-year US Treasury note also rose to 4.585%, reflecting the market's repricing of the upward shift in the medium- to long-term interest rate center. The interest rate swap market has already moved forward to October as the earliest possible time for the Fed to raise interest rates, compared to the expectation of December a week ago. ⑷ This week, the market faces its most crucial test of the year. US June CPI data will be released on Tuesday, and PPI on Wednesday. The market expects overall inflation to slow slightly year-on-year, but core indicators will remain significantly above the 2% target. The data will directly influence the judgment on the subsequent pace of interest rate hikes. (5) Federal Reserve Chairman Warsh will testify before the House of Representatives on Tuesday and the Senate on Wednesday, marking his first congressional monetary policy statement since taking office. His definition of the current economic situation and assessment of geopolitical risks will be key factors in the market's interpretation of the policy path. (6) The current 4.6% yield on 10-year US Treasury bonds is approaching a technical breakout level. If inflation data exceeds expectations and geopolitical premiums persist, further increases in yields will put contractionary pressure on risk assets and the real economy. This week's CPI reading and Warsh's testimony will jointly determine the short-term direction of interest rates.
