Bond Market Update

Yields Up

• Treasury yields continue to drift higher, with inflation concerns presumably doing today's driving. Those concerns perked up after the president said Canada will face a 35% tariff rate on August 1 for imports not covered by USMCA, that the EU will get a tariff letter, and that most countries will be paying a 15% to 20% tariff rate.
• It has been a steady grind higher today, with all maturities under some selling pressure.
• In conjunction with the inflation concerns, participants are also ruminating about the idea that ratcheting up tariff rates on August 1 will keep the Fed in a wait-and-see mode when it comes to cutitng rates.
• Next week's CPI and PPI reports for June are looming large as market movers.
• The U.S. Dollar Index is up 0.2% to 97.81.
• Yield check:
  • 2-yr: +3 bps to 3.90%
  • 3-yr: +4 bps to 3.88%
  • 5-yr: +4 bps to 3.98%
  • 10-yr: +6 bps to 4.41%
  • 30-yr: +8 bps to 4.95%