Treasury yields climb to multi-decade highs amid inflation fears
El-Erian acknowledged that a geopolitical resolution could bring crude prices lower, but drew a firm line between short-term energy dynamics and the structural forces pushing yields higher.
“If [the war] gets resolved, oil prices will come down,” he said.
“But I’m willing to bet that 10-year yields will still be around 5%. We’re not going back to four, four-fifty, four twenty-five, simply because there’s too much of an imbalance in the supply and demand.”
At the time of his remarks, the 10-year yield was trading up nearly 3 basis points at 5.209%, with US crude oil rising 2.8% to $94.96 a barrel.
A data-heavy week ahead
With yields already elevated, a dense economic calendar this week could extend the pressure. The August Job Openings and Labor Turnover Survey (JOLTS) report, expected Tuesday, is forecast to show job openings dipped slightly to 7.24 million from 7.27 million in July, according to analyst estimates.
