Someday I’ll be able to stop talking about crude oil and Treasury yields. But it is not this day. The rising price of black gold – and the rising cost of money – remain the biggest market stories...still.
Take a look at the MoneyShow Chart of the Day. It shows the year-to-date percentage change for WTI crude oil futures – and for yields on the 10-Year Treasury Note and 30-Year Treasury Bond. All three continue to rise inexorably, with the move in yields gaining steam the last several days.
WTI Crude Oil (Black), US 10-Year Yield (Green),
US 30-Year Yield (Red) – YTD % Change
Source: TradingView
The moves are linked, of course. Higher oil prices fuel higher inflation, which in turn fuels upward moves in yields. But more is at work.
Companies are raising massive amounts of money to fuel the AI capex boom. The resulting flood of bond supply is helping to push all yields higher. The Federal Reserve and foreign central banks are all raising short-term rates. Plus, US and foreign government deficits and debt loads are rising sharply. That’s all combining to make money more expensive.
What could finally push oil and yields off the front page? Peace in the Middle East and fiscal discipline in Washington. But both are big “asks” – and so far, the market isn’t getting the answers it wants!
