04.02.202613:57:06UTC+00US 10-Year Yield Approaches 5-Month High

The yield on the 10-year U.S. Treasury note edged up to 4.29%, nearing its five-month peak of 4.3% reached on January 20th. This rise followed the U.S. Treasury's decision to keep its forecasted issuance of Treasuries unchanged for the upcoming quarters. Notably, the Treasury opted to allocate a greater share of its borrowing to short-term bills rather than long-duration bonds. This strategy aims to alleviate the debt load posed by high interest rates. The move differed from some expectations that the Treasury might reduce the supply of long-term bonds as part of President Trump's strategy to moderate mortgage rates. Additionally, Treasuries felt pressure after President Trump nominated Kevin Warsh as the next Fed Chairman. Warsh has previously supported the idea of the central bank maintaining a smaller balance sheet. Another factor contributing to rising yields was strong performance in the manufacturing sector, as shown by the ISM PMI. Conversely, the labor market, scrutinized more closely due to delays in the January BLS jobs report, continues to show sluggish hiring, according to data from ADP.