Long-term US Treasury yields held most of the gains recorded after the Federal Reserve's decision this week. A series of US economic data shows that inflation is still high and the labor market is resilient. The yield on 30-year US Treasury bonds rose more than 10 basis points on Wednesday after the Federal Reserve kept interest rates unchanged, to the highest level since 2007, and remained around 5.20% on Thursday. The US Treasury options market continues to experience significant demand to hedge against the risk of further increases in yields in the coming weeks. The US economic data released on Thursday includes the inflation index favored by the Federal Reserve — the personal consumption expenditure price index calculated based on June personal income and expenditure data. The index slowed to 3.7% from 4.1% in May, in line with economists' expectations. The indicator has been above the Federal Reserve's 2% target every month since March 2021. Meanwhile, oil prices, which had fallen back in June, soared again after the US resumed attacks on Iran. “If inflation does not slow down, then there is a risk that long-term bond yields will rise further,” said Jens Peter Sorensen, chief analyst at Danske Bank. “The market is still speculating how many times interest rates will need to be raised, and the time of rate hikes may be later than expected.”

Long-term US Treasury yields held most of the gains recorded after the Federal Reserve's decision this week. A series of US economic data shows that inflation is still high and the labor market is resilient. The yield on 30-year US Treasury bonds rose more than 10 basis points on Wednesday after the Federal Reserve kept interest rates unchanged, to the highest level since 2007, and remained around 5.20% on Thursday. The US Treasury options market continues to experience significant demand to hedge against the risk of further increases in yields in the coming weeks. The US economic data released on Thursday includes the inflation index favored by the Federal Reserve — the personal consumption expenditure price index calculated based on June personal income and expenditure data. The index slowed to 3.7% from 4.1% in May, in line with economists' expectations. The indicator has been above the Federal Reserve's 2% target every month since March 2021. Meanwhile, oil prices, which had fallen back in June, soared again after the US resumed attacks on Iran. “If inflation does not slow down, then there is a risk that long-term bond yields will rise further,” said Jens Peter Sorensen, chief analyst at Danske Bank. “The market is still speculating how many times interest rates will need to be raised, and the time of rate hikes may be later than expected.”