Stocks are under modest pressure again this morning after a late day fade yesterday. Crude oil is up, while gold, silver, and Treasuries are mixed. Bitcoin and other cryptocurrencies are broadly lower.
Interest rates are front and center on Wall Street this week. For one thing, the 10-Year Treasury Note yield recently topped 5% again for the first time since 2023 – then rose to 5.04% this morning, its highest since 2007. Yields on the 2-year and 30-year are also rising, hitting 4.65% and 5.37%, respectively.
That brings the Federal Reserve squarely into focus. Its two-day rate-setting meeting started today. Rate futures markets are pricing in a 90%-plus chance the Kevin Warsh Fed hikes rates by 25 basis points to a range of 3.75% to 4%. They’re also increasingly pricing in the likelihood of another increase in the next few months.
US 2-Yr (Red), 10-Yr (Blue), 30-Yr (Green) Yields
Source: TradingView
This comes as 30-year fixed mortgage rates are back up around 7% - and the housing market is moribund. Treasury Secretary Scott Bessent has attempted to tamp down longer-term rates by announcing things like government bond buybacks. But so far, those efforts haven’t had more than a very short-term impact. The iShares Core US Aggregate Bond ETF (AGG), a broad benchmark for bond market performance, is down about 4.2% year-to-date.
Crude oil is the other market investors are closely watching. Prices are up modestly again today after fresh Houthi attacks on Saudi Arabian military facilities. Traders are also trying to determine how long the country’s East-West pipeline will remain offline.
The pipeline has allowed the Saudis to pump oil for export via the Red Sea, avoiding the Strait of Hormuz. But Houthi attacks knocked it out, and reports have suggested it could take weeks to resume shipments at full strength. The United States Brent Oil Fund (BNO) is up 24.8% in the past month.
