Treasury yields fall as oil prices continue their slide this week

Treasury yields fell Tuesday as oil prices continued their slide this week.

The yield on the 10-year Treasury note — the key benchmark for mortgages, auto loans and credit card debt — was more than 7 basis points lower at 4.629%.

The longer-dated 30-year Treasury bond yield was more than 6 basis points lower at 5.163%. The yield on the 2-year Treasury note, which typically reacts in line with short-term Federal Reserve interest rate decisions, shed more than 5 basis points to 4.183%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

Oil prices slid more than 3% Tuesday, as the U.S. shifted toward using economic sanctions on Iran as opposed to military strikes. Brent futures, the international benchmark, fell 3.2% to $89.20 per barrel. U.S. West Texas Intermediate crude was down 3.3% at $82.21 a barrel.

Consumer confidence also diminished in August, down to 89.4 from 90.2 in the prior month. It’s the lowest level since January.

Borrowing costs moved lower on Monday after two senior Treasury officials indicated that the Treasury could use its near $1 trillion General Account to pay for its ramped-up repurchases of government bonds. The officials did not say how much of the TGA may be used to finance the buybacks.

With bond markets in focus following Treasury Secretary Scott Bessent’s historic intervention last week, investors are awaiting Federal Reserve Chair Kevin Warsh’s keynote address at this year’s annual Jackson Hole Symposium, due Friday.

“There is no doubt that the Fed chair will continue in the vein of the first two FOMC meetings, where the void created by Jerome Powell’s departure — in terms of guiding market expectations — will remain,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers.

“This meeting could therefore disappoint the markets or even increase tensions on the long end of the yield curve, which is already under significant pressure.”

Meanwhile, July’s personal consumption expenditure reading — the Fed’s preferred inflation gauge — is due Wednesday, along with the second quarter GDP estimate, as investors continue probe data for insights into the U.S. economic picture.