Treasury Yields Move Lower

Published August 15, 2025

U.S. Treasury yields rose towards the end of the week following the release of higher-than-expected monthly producer prices. Yields continued to rise on Friday as investors wait for next week’s Federal Reserve meeting.

On Thursday, the Bureau of Labor Statistics released July’s producer price index (PPI) which indicated a rise in inflation. The July PPI grew 0.9%, exceeding economists’ estimates of a 0.2% growth. Year-over-year, the increase in wholesale prices reached 3.3%, the highest level since February and well above the Federal Reserve’s 2% target.

“The large spike in the Producer Price Index this morning shows inflation is coursing through the economy, even if it has not been felt by consumers yet,” said chief investment officer at Northlight Asset Management, Chris Zaccarelli. “Given how benign the CPI numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a ‘guaranteed’ rate cut next month.”

The benchmark 10-year Treasury note yield opened the week of August 11 at 4.29% and traded as high as 4.32% on Tuesday. The 30-year Treasury bond opened the week at 4.85% and traded as high as 4.91% on Tuesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment were 224,000 for the week ending August 9. This was down 3,000 from the prior week and fell below expectations of 228,000. Continuing unemployment claims decreased by 15,000 to 1.95 million.

“Viewed in isolation, those (claims) figures would suggest that labor market conditions remain strong,” said chief economist of Wrightson ICAP, Lou Crandall. “However, we give more weight to the softer trend in the payroll series over the last three months, which obviously tells a different story.”

The 10-year Treasury note yield finished the week of 8/11 at 4.32, while the 30-year Treasury note yield finished the week at 4.92%.