Latest news with #TreasuryYields
Forbes
2 days ago
- Business
- Forbes
This Boring-Sounding Economic Shift Could Boost Your Savings Cushion
Forbes Something as dry-sounding as a Treasury yield might not seem like it impacts your wallet, but it absolutely does. Yields are flashing warning signs about how investors feel about the economy, and the ripple effects are hitting everything from mortgage rates to savings accounts. When investors expect the economy to slow down, they buy safer things like government bonds—which pushes yields lower and signals worry about the future. According to the U.S. Department of the Treasury, the 10-year Treasury yield sits at 4.36% as of June 12, 2025, among the highest levels in recent years. Right now, one of the smartest money moves you can make is parking your savings in a high-yield account that benefits from rising Treasury yields. Related: Looking for the perfect banking solution? Compare products from multiple banks with Forbes Advisor. Treasuries are government bonds, and their yields reflect how much the government must pay to borrow money. These yields also set the tone for interest rates, including those of mortgages, student loans and savings accounts. "When Treasury yields climb, it's not just Wall Street that takes notice. Main Street feels it, too," says Christopher M. Naghibi, executive vice president and COO at First Foundation Bank. 'The 10-year Treasury is like the economy's mood ring. When yields are rising, it usually means investors expect inflation to hang around or they're uneasy about the Fed's next move.' When yields rise, borrowing gets more expensive and saving becomes more rewarding. Here's how it plays out for consumers: "For consumers, you already can feel that borrowing has gotten palpably more expensive," says Naghibi. "On the flip side, savers finally get to feel like they're not being punished. Just a few years ago, you couldn't get a liquid money-market account with a meaningful interest rate. Now you have a charcuterie board of options to choose from." When Treasury yields go up, the interest you earn on savings accounts and CDs often rises, too. That's not just a market quirk. It's actually built into how banks are allowed to compete for your deposits. According to the Federal Deposit Insurance Corporation (FDIC), the cap on how much interest certain banks can offer is partly tied to Treasury yields. For example, the national rate cap for a 12-month CD is calculated as the greater of either the national average plus 75 basis points or 120% of the current yield on similar U.S. Treasury securities plus 75 basis points. As Treasury yields rise, banks get more room to offer higher savings rates. Read more: Our picks of the best high-yield savings accounts High-yield savings accounts (HYSAs) are one of the best ways to benefit from rising Treasury yields without taking on market risk. These accounts are FDIC-insured, meaning your money is protected up to $250,000 per depositor, per insured bank, per ownership category. "Let's say you have $10,000 sitting in a regular [savings] account. You'd earn about a dollar a year in interest. With a high-yield savings account at 4.5%, you'd earn around $450—without doing anything," says Naghibi. Rising yields can feel intimidating, but they also open the door to strategic financial decisions: "Lock in fixed rates where you can, consider laddering CDs, and if you're feeling fancy, a well-balanced bond fund might help you ride the ups and downs without losing your shirt," Naghibi says. Read more: Our picks of the best CD rates To help you take advantage, here are high-yield savings accounts we vetted based on APY, fees, accessibility and digital experience. All are FDIC-insured. Synchrony High-Yield Savings Best for: Stand-alone savings and emergency funds Synchrony stands out with strong customer service, a solid APY and rare ATM access for a savings account. Details as of 6/5/25. American Express High-Yield Savings Best for: Simplicity and brand familiarity This digital account is easy to use and offers a higher-than-average yield for a big-name bank. Details as of 6/5/25. Barclays Online Savings Best for: Fee-free savings with no strings attached With zero fees and no minimum, this account makes it easy to start saving, even with $1. Details as of 6/5/25. Marcus by Goldman Sachs High-Yield Online Savings Best for: Support and stability Marcus offers a solid APY, 24/7 customer support and zero account hassles. Details as of 6/5/25. Rising Treasury yields influence how much we pay for loans and how much we can earn on savings. While you can't control bond markets or government spending, you can take smart steps to keep your money safe and growing. "The 10-year is more than just a number," says Naghibi. "It's a pulse check on the economy, and it pays (literally) to pay attention. I watch it daily, multiple times through the day." Related: Looking for the perfect banking solution? Compare products from multiple banks with Forbes Advisor.
Bloomberg
3 days ago
- Business
- Bloomberg
Treasuries Hold Gains as Fed Rate-Cut Expectations Remain Intact
By and Michael Mackenzie Save Treasury yields declined Tuesday as US economic data left intact expectations that the Federal Reserve will cut interest rates at least once more in 2025. Most yields were lower by two to three basis points, off session lows, following the release of mixed retail sales data for May. The two-year rate, most sensitive to Fed policy shifts, fell less than two basis points to 3.95%, while the 10-year yield fell three basis points to 4.42%.
Reuters
12-06-2025
- Business
- Reuters
TRADING DAY Dollar despair deepens
ORLANDO, Florida, June 12 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. The dollar's slide accelerated on Thursday, as more evidence of cooling U.S. price pressures weighed on Treasury yields and dragged the greenback to lows against a basket of major currencies not seen in more than three years. In my column today I look ahead to next week's Fed meeting. With inflation cooling but tariffs yet to kick in, is Fed policy still in a "good place" as Chair Jerome Powell repeatedly said last month? More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Dollar despair deepens The dollar grabbed the global market spotlight on Thursday, and once again, for the wrong reasons. If it's failing to get any support when U.S. bond yields are rising, it's getting hit even harder when they're falling. As was the case on Thursday. After a string of recent soft consumer inflation prints, it was the turn of producer price inflation to cement the view that U.S. price pressures aren't as hot as economists have thought. Tariffs have yet to be fully felt, of course, but right now inflation across the board is pretty tame. Rates traders brought forward the timing of when they think the Fed will cut interest rates to September from October and, also supported by a strong 30-year bond auction, yields fell across the curve. The dollar index is now down 10% year to date, and the euro is up 12%. We're only at the half-way point of the year, but it's worth noting that the last time the dollar fell more than 10% in a calendar year was 2003. Much of its weakness this year is down to non-U.S. investors hedging their exposure to U.S. assets much more than they have previously. In effect, that equates to selling dollars, and European pension and insurance funds are at the heart of it. "Our analysis suggests there is much more still to come," reckon analysts at BNP Paribas, recommending that investors buy the euro with a target of $1.20. They calculate that if Dutch and Danish pension funds reduce dollar exposure to 2015 levels as a share of total assets under management, they have a further $217 billion to sell. And that's just Danish and Dutch funds. On the tariffs front, investors are still digesting this week's U.S.-China deal, outlined by Washington on Wednesday and confirmed by Beijing on Thursday. Still, there is some ambiguity around key elements of the deal, including rare earth export licenses and details of the tariffs. JPMorgan's U.S. economists calculate that, all told, the total effective U.S. tariff rate will be around 14%. When levied on $3.1 trillion of imported goods, that equates to a tax on U.S. businesses and consumers of over $400 billion. It remains to be seen how that is split, but history shows consumers bear most of the burden, they note. "The stagflationary impulse from higher tariffs has lowered our GDP growth outlook for this year (4Q/4Q) from 2.0% at the start of the year to 1.3% currently," they wrote on Thursday. On the other hand, economists at Oxford Economics on Thursday raised their 2025 U.S. GDP forecast to 1.5% from 1.3% and said the likelihood of recession has fallen. You pay your money, you take your choice. Is the Fed still in a "good place"? At the Federal Open Market Committee meeting next week, investors will scrutinize all communications for any sign that the recent softening in U.S. inflation could be enough to nudge policymakers closer to cutting interest rates. Current economic data might be leaning in that direction, but policy out of Washington could well keep Chair Jerome Powell and colleagues in 'wait and see' mode. No one expects the Fed to cut rates next week, but businesses, households and investors should get a better sense of policymakers' future plans from the revised quarterly Staff Economic Projections and Powell's press conference. Powell was very clear in his post-meeting press conference last month that the Fed is prepared to take its time assessing the incoming economic data, particularly the impact of tariffs, before deciding on its next step. He told reporters no less than eight times that policy is in a "good place" and said four times that the Fed is "well positioned" to face the challenges ahead. Will he change his tune next Wednesday? Annual PCE inflation in April was 2.1%, the lowest in four years and virtually at the Fed's 2% target, while CPI inflation in May was also lower than expected. The labor market is softening, economic activity is slowing, and recent red-hot consumer inflation expectations are now starting to come down. In that light, it may be surprising that markets are not fully pricing in a quarter-point rate cut until October. "The upcoming meeting offers an opportunity (for Fed officials) to signal that the recent mix of tamer inflation and softer consumption growth warrant a careful 'recalibration' of rates lower, while remaining very cautious about what comes next," economist Phil Suttle wrote on Wednesday. But there are two well-known barriers that could keep the Fed from quickly re-joining the ranks of rate-cutting central banks: tariffs and the U.S. fiscal outlook. Tariffs have yet to show up in consumer prices, especially in goods, and no one knows how inflationary they will be. They could simply result in a one-off price hit, they could trigger longer-lasting price spikes, or the inflationary impact could end up being limited if companies absorb a lot of the price increases. In other words, everything is on the table. Equity investors appear to be pretty sanguine about it all, hauling the S&P 500 back near its all-time high. But Powell and colleagues may be slower to lower their guard, and for good reason. Although import duties on goods from China will be lower than feared a few months ago and Washington is expected to seal more trade deals in the coming weeks, overall tariffs will still end up being significantly higher than they were at the end of last year, probably the highest since the 1930s. Economists at Goldman Sachs reckon U.S. inflation will rise to near 4% later this year, with tariffs accounting for around half of that. This makes the U.S. an "important exception" among industrialized economies, the OECD said last week. The other major concern is the U.S. public finances. President Trump's 'big beautiful bill' being debated in congress is expected to add $2.4 trillion to the federal debt over the next decade, and many economists expect the budget deficit will hover around 7% of GDP for years. With fiscal policy so loose, Fed officials may be reluctant to signal a readiness to loosen monetary policy, especially if there is no pressing need to do so. FOMC members in December last changed their median forecasts for the central bank's policy rate, hiking it this year and next year by a hefty 50 basis points to 3.9% and 3.4%, respectively. They left projections unchanged in March amid the tariff fog. That implies 50 basis points of rate cuts this year and another 50 bps next year, which is pretty much in line with rates futures markets right now. So perhaps Fed policy is still in a "good place", but with economic expectations changing quickly, it's unclear how long that will be the case. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
Washington Post
12-06-2025
- Business
- Washington Post
How major US stock indexes fared Thursday, 6/12/2025
U.S. stocks drifted higher following another encouraging update on inflation. The S&P 500 added 0.4% Thursday and is sitting less than 2% below its record. The Dow Jones Industrial Average rose 0.2%, and the Nasdaq composite rose 0.2%. Treasury yields fell again in the bond market after an update on inflation at the wholesale level came in better than expected, while a report on joblessness was slightly worse than forecast.
Wall Street Journal
12-06-2025
- Business
- Wall Street Journal
Treasury Yields Fall Amid Concerning Labor Data, Mild Inflation
0900 ET – U.S. labor and inflation data deepen a decline in Treasury yields. Weekly jobless claims were unchanged from the previous week's upwardly revised pace, at 248,000. Economists surveyed by WSJ expected 246,000. Continuing claims, a measure of the unemployed population, was 1.96 million, the highest level since November 2021. May's wholesale price inflation was 0.1%, accelerating from April's 0.2% deflation and below consensus of a positive 0.2%. The combination of slower-than-expected inflation and concerning labor data underscores bets that the Fed may need to change its hawkish position. Yields were already declining and fell further after the data. The 10-year Treasury yield is at 4.360% and the two-year at 3.891%. ( @ptrevisani) 0614 GMT – A downside surprise in U.S. CPI data gave only a small boost to Treasurys, probably because tariff-driven price hikes still look imminent, says Capital Economics' James Reilly in a note. That said, these price hikes look discounted in markets, shielding Treasury yields from rising pressure, the senior markets economist says. 'We don't expect much upwards pressure on Treasury yields even as the inflationary impact of tariffs eventually feeds into U.S. consumer prices,' he says. Capital Economics expects core inflation to rise in coming months but it thinks that investors are already braced for a broadly similar outcome on tariffs, he says. (
