Weekly Commentary: Bonds Bludgeoned

2026-05-16 03:00:39 ET

It was rough. And I'm not referring to Iran war negotiations or President Trump's Beijing trip. The bond rout was global.

"Treasury Buyers Get 5% Long Bond for First Time Since 2007." Treasury long bond (30yr) yields jumped 18 bps this week to 5.12%, surpassing the October 2023 gilt crisis spike to the highest yield all the way back to ("still dancing") July 2007. Ten-year Treasury yields surged 24 bps this week to a one-year high of 4.59%, the largest weekly rise since the Treasury market "liberation day" dislocation the week of April 11th, 2025. Two-year Treasury yields jumped 18 bps to 4.07% - the highest level since February 25, 2025. Benchmark Fannie Mae MBS yields spiked 27 bps to a 10-month high of 5.57% - the largest weekly jump since "liberation day."

May 15 - Bloomberg (James Hirai): "UK government bonds tumbled after Manchester Mayor Andy Burnham secured a pathway to potentially challenge Keir Starmer as prime minister, threatening political instability that investors fear could result in more expansive fiscal policy. The yield on 30-year gilts, the most sensitive maturity to political risk, surged as much as 20 bps to 5.86%, the highest since 1998. Concerns about high energy costs and inflation also contributed to the move. Burnham's announcement that he intends to run for Parliament - a prerequisite to challenge Starmer - put the pound on track for its worst week since 2024 against the dollar."...

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