Long-Term Yields Surge Amid Economic Resilience and Persistent Inflation

Key Intelligence

• ■Long-end US Treasury yields have reached 24-year highs, driven by perceptions of underlying economic strength.
• ■The US service sector experienced slower growth, but a key price gauge hit a four-year high, indicating persistent inflationary pressures.
• ■A stronger US dollar and elevated yields are weighing on commodities like gold and influencing the outlook for future interest rate paths.
• ■Credit markets are showing mixed signals, with JPMorgan anticipating a rally in US high-grade credit, while a KKR private credit fund exceeded its redemption cap to meet investor withdrawals.
• ■Global economic indicators show varying responses to tightening, with Australian consumer confidence falling further after a rate hike.