Rates Spark: The Dust Settles, Angst Remains

2025-04-16 04:05:00 ET

Summary

• The volatility in global rates markets seems to have eased somewhat, but the tension in US Treasury bonds can still be felt.
• What helps is that the current 10Y UST yield of 4.3% is well within the trading range of the past few years.
• US Treasuries are recovering for now, but they remain tainted by inflation and deficit pressures, painting a sinister backdrop.

By Michiel Tukker , Benjamin Schroeder

As the dust settles around USTs, market participants are still alarmed

The volatility in global rates markets seems to have eased somewhat, but the tension in US Treasury bonds can still be felt. So far, nothing in the financial plumbing of markets seems to have broken, which is a sign of resilience after the recent sharp moves. What helps is that the current 10Y UST yield of 4.3% is well within the trading range of the past few years. Remember that the 10Y touched 5% in 2023. Earlier that year, SVB Bank collapsed due to losses in its bond portfolio. Now, financial institutions have got used to the new yield levels for a prolonged period....

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