The 2-year Treasury yield jumped more than 9 basis points Tuesday, to 3.925%, after weak demand in a $69 billion auction.
The bid-to-cover ratio in the two-year auction — how many dollars of investment chase every dollar of securities available — was only 2.44, the narrowest bid-to-cover since May 2024. Direct bidders were the weakest since March 2025.
Markets “continue to prioritize renewed inflation concerns over any economic growth concerns. And with still no signs of tensions easing in Iran, and thus the potential for still higher oil prices, the path of least resistance for yields continues to be higher,” said Lawrence Gillum, chief fixed income strategist at LPL Financial.
The 10-year Treasury yield jumped on Tuesday as well, climbing more than 5 basis points, to 4.392% on renewed volatility in oil markets and continued military attacks in the Middle East. The 30-year yield added more than 4 basis points to 4.956%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The move higher in yields came as oil prices rebounded Tuesday, reversing part of the sharp losses seen in the previous session as traders reassessed developments in the Middle East conflict.
“Headline risk remains particularly elevated as the war continues without a clear off-ramp,” wrote Ian Lyngen, BMO head of U.S. rates strategy, adding that U.S. rates are likely to take their primary cue from swings in energy prices until there is greater clarity on the war.
Oil slumped on Monday after President Trump said Washington and Tehran had held “very good and productive conversations” toward ending hostilities, and he had ordered a five-day pause on planned strikes against Iran’s energy grid.
The partial reversal Tuesday, however, suggested markets remain unconvinced that tensions will ease quickly, particularly after Iranian officials denied that any talks had taken place.
Analysts noted that conflicting headlines have reinforced uncertainty, keeping both energy and rates markets sensitive to developments. Easing tensions and lower oil prices had briefly supported Treasurys earlier on Monday, but renewed uncertainty is once again weighing on sentiment.
https://image.cnbcfm.com/api/v1/image/108280360-1774015191970-108280360-1773934197181-108280360-1773934139955-gettyimages-2267387124-anotherday197764454_c8chuftf.jpg?v=1774015201&w=1920&h=1080
2026-03-24 15:01:50
Leave a Reply