Investors See No Let-Up In Bond Market Strain

LOADINGERROR LOADINGNEW YORK, May 19 (Reuters) - The latest sharp selloff in U.S.Treasuries may be far from over.A combination of stubborn inflation, shifting expectations about interest rates, and changes in investor behavior could keep pressure on bond prices and drive yields even higher in the weeks ahead, analysts said.On Tuesday, the benchmark 10-year yield climbed to its highest level since January last year and was last at 4.671% US10YT=RR.

U.S.30-year yields, on the other hand, jumped to a level not seen since June 2007, and last changed hands at 5.178%.Advertisement For months, many investors have viewed the 4.5% yield on the benchmark 10-year note as an attractive point to step in and buy bonds.

But as yields surged through that level, market participants adjusted their view of where buyers would next bite.“It feels a little ugly right now and this selloff can definitely continue,” said Gregory Faranello, head of U.S.rates strategy at AmeriVet Securities in New York.“This kind of feels like the Covid era, but we weren’t raising rates through Covid, we were lowering rates.

So it’s very tricky and there are definitely some technical things coming into play.”Advertisement Padhraic Garvey, head of global rates and debt strategy at ING believes that the 10-year yield is headed to 4.75%, citing several underlying forces that continue to fuel the selling.Rising benchmark yields pose a challenge for U.S.stocks, as higher borrowing costs weigh on companies and consumers.A trader works at his desk on the floor of the New York Stock Exchange (NYSE) in New York on May 19, 2026.

Wall Street stocks retreated early Tuesday as analysts pointed to angst over inflation pressures as the prolonged Middle East war kept oil prices high.(Photo by TIMOTHY A.

CLARY / AFP via Getty Images)TIMOTHY A.CLARY via Getty ImagesAdvertisement A key driver, however, remains inflation: recent consumer and producer price data have come in stronger than expected...