SynopsisUS Treasury yields fell as declining oil prices and renewed confidence in the Federal Reserve’s inflation fight eased pressure on the bond market. 95%, snapping an eight-day rise, while investors weighed the possibility of further rate hikes after the Fed’s latest decision.

comUS Treasuries rally as oil prices fall and rate hike concerns ease. US Treasuries rallied on Thursday as a retreat in oil prices and a sharp rebound in UK government bonds helped ease pressure on global debt markets after the Federal Reserve raised interest rates and signalled that more tightening could follow, according to a Bloomberg report.

Yields across maturities fell by at least five basis points, with the two-year and five-year yields pulling back from multiyear highs reached after Wednesday’s Fed decision. 95%, snapping an eight-day run of increases.

75%-4%, a move that had been largely priced in by markets. “The Fed seemed credible in terms of fighting the inflation tail risk — that’s a positive for bond investors,” said Michael Chang, an analyst at Citi.

“That’s reflected in long-term inflation expectations coming off yesterday and today.” 7% in July, close to its highest level since 2023 and well above the central bank’s 2% long-term target.

Warsh said recent summer inflation readings did not indicate a meaningful improvement in underlying price pressures. The Fed’s latest projections showed a median expectation for one more rate hike this year, although Warsh said he did not contribute to those projections.

The rate increase also appeared to strengthen investor confidence that the central bank is willing to keep fighting inflation, helping pull longer-term Treasury yields lower. Oil remains key driver for bond yieldsOil prices provided another boost to Treasuries on Thursday.

3% to below $100 a barrel, extending a decline from Tuesday’s high near $107. Oil has become a major driver of Treasury yields since late February, when the US attacked Iran and disrupted Middle East exports.

“Most of the moves we’re getting in 30-year yields are a function of oil,” said Blake Gwinn, head of US rates strategy at RBC Capital Markets. “The correlation has become self-reinforcing.”

The decline in oil prices also weighed on demand for a $19 billion reopening of 10-year Treasury inflation-protected securities. 653% yield, around two basis points above its pre-auction level, suggesting demand was weaker than expected.