The 10-year Treasury yield rose on Friday after the latest retail sales figures were lower than expected and the United States said its naval blockade of Iranian ports could continue “indefinitely.”
The yield on the 10-year Treasury note, a key measure of U.S. government borrowing, rose more than 5 basis points to 4.696%.
The yield on two-year Treasuries, which is more closely linked to the Federal Reserve’s short-term interest rate policy, added three basis points to 4.171%. The yield on the 30-year Treasury note rose nearly 6 basis points to 5.267%.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Retail sales in July fell by an astonishing 0.6%. Economists polled by Dow Jones had called for a 0.1% rise.
Yields initially rose following comments from U.S. Treasury Secretary Scott Bessent in an interview with Newsmax in which he warned of new measures aimed at “economic isolation” of Iran, “the likes of which we have never seen before.”
Bessent’s comments came after U.S. Defense Secretary Pete Hegseth told reporters that the U.S. military may maintain an indefinite blockade of Iranian ports.
The producer price index, which measures the amount wholesalers pay for raw materials and raw materials, was flat in July from the previous month. Economists polled by Dow Jones had expected a rise of 0.2%.
Thursday’s print reflects a tame view on consumer inflation, with the consumer price index in line with economists’ expectations.
“This week’s U.S. inflation data is subdued, which is very welcome for U.S. Treasuries,” ING strategists said in a note Friday. “This completely relieves upward pressure on interest rates. But the pressure is by no means gone. Real yields have risen further and will likely continue to do so.”
—CNBC’s Hugh Leask also contributed to this report.
