US Treasuries Losing Control

US 10-year Treasury yields have broken past key support levels to reach 4.65%, driven by a sharp rise in real yields following failed diplomatic summits and ongoing Middle East tensions.

Key Takeaways

• 1.US 10-year Treasury yields have surged past the 4.5% support level, hitting 4.65% as instability increases.
• 2.The recent rise in yields is primarily driven by higher real yields rather than increased inflation expectations.
• 3.Geopolitical tensions, particularly the closure of the Strait of Hormuz and the lack of a US/China summit agreement, are driving market volatility.

Table of Contents

• From 'we've got this' to 'oops, do we have this' on US Treasuries
• US 10yr Treasury yield since the Iran war broke
• The remarkable drive higher in real yields – what's that all about?
• Our base case is challenged, but in fact not taken out.

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