Archive · 23 Jul 2026
Two-year yields hit 17-month high on oil surge, Fed fears
The price of two-year U.S. Treasury bonds went up to its highest level in 17 months.
This happened because oil prices are rising, and people are worried that this could make inflation worse.
The Federal Reserve, which controls interest rates, has been talking about raising rates to fight inflation.
Some people think this is a good idea, while others are worried it could slow down the economy.
The chance of a rate hike by the end of the year is very high, at 90%.
Two-year U.S. Treasury yields hit a 17-month high due to rising oil prices and Fed rate hike expectations.
Fed funds futures price a 32% chance of a rate hike next week and 90% by year-end.
Five-year TIPS breakevens rose to 2.31%, indicating higher inflation expectations.
Treasury sees soft demand for $13 billion 20-year bonds sale.
Rising gilt yields driven by fiscal concerns in Europe also pushed U.S. Treasury yields higher.
- Who
- U.S. Federal Reserve, Treasury Department, investors
- What
- Rising two-year Treasury yields due to oil price surge and Fed rate hike expectations
- When
- July 22
- Where
- New York
- Why
- Concerns about inflation and Fed's hawkish stance on interest rates
Hawkish Fed Policy Supporters
Dovish Fed Policy Supporters
Interest Rate Hikes
Hawkish Fed Policy Supporters
Support raising interest rates to combat inflation and stabilize the economy.
Dovish Fed Policy Supporters
Oppose raising interest rates, fearing it could stifle economic growth and increase unemployment.
- Two-year Treasury yield
- 4.3105%
- Ten-year Treasury yield
- 4.6606%
- Five-year TIPS breakevens
- 2.31%
- Probability of rate hike by September
- 76%
- Probability of rate hike by year-end
- 90%
- Fed meeting date
- July 29