US 10-Year Yield Dips Below 5% Amid Energy Price Decline

The yield on the 10-Year US Treasury note dipped to 4.96% on Monday, following a temporary peak of 5.01% earlier in the session.

This slight pullback was influenced by a decline in key energy prices, which occurred after President Trump indicated that Russia and Ukraine would halt strikes on energy infrastructure.

However, despite this development, energy inflation continued to exert pressure on Treasuries across the curve. Recent data suggests that tariffs and high fuel costs have impacted underlying inflation gauges.

The Federal Reserve is expected to raise its rates by 25bps on Wednesday, which has contributed to the increase in long-maturity Treasury yields. Soaring levels of corporate debt from AI companies have also limited capital allocation by primary dealers and other financial institutions.