The yield on the 10-year US Treasury note held above 4.7% on Monday, hovering near last session’s 20‑month high of 4.75%, as expanding fiscal deficits and a surge in corporate bond issuance continued to push long-term yields higher. The Treasury announced it would use its general account balance to step up buybacks of long‑duration securities, reinforcing efforts to ease yields following the coordinated intervention on the Japanese yen—conducted via euro sales—and the request for the Federal Reserve to raise the cap on its FIMA facility.
Yields at the long end of the curve have climbed sharply since July, driven by heavy debt issuance from AI-related firms and increased federal deficit spending. Long-term rates also advanced after Fed Chair Warsh indicated that raising policy rates might not be his preferred instrument to fight elevated inflation, heightening anticipation around his upcoming remarks at Jackson Hole. Fears of de-anchored inflation expectations were further exacerbated by elevated energy prices amid the US–Iran tanker blockade in the Persian Gulf.
