Treasury bond yields closed higher across the board on the 30th. With U.S.-Iran cease-fire talks stalled and the U.S. Federal Reserve seen as less likely to cut its benchmark interest rate, demand for Treasurys fell. When bond demand declines, prices fall and yields rise.
On the Seoul bond market that day, the 1-year Treasury yield ended at 3.02%. It rose 2.4bp (1bp=0.01 percentage point) from the previous transaction day, the highest since Sept. 5, 2024 (3.021%).
The 2-year rose 7bp to 3.475%, the 3-year rose 7bp to 3.595%, and the 5-year rose 7.4bp to 3.78%. The 10-year rose 8bp to 3.923%, the 20-year rose 10.2bp to 3.876%, the 30-year rose 9.7bp to 3.79%, and the 50-year rose 9.2bp to 3.649%.
U.S. President Donald Trump said on the 29th (local time) that he would continue the blockade of the Strait of Hormuz until reaching a nuclear deal with Iran. West Texas Intermediate (WTI) crude exceeded $100 on the news.
The Federal Reserve decided at the Federal Open Market Committee (FOMC) meeting to keep rates unchanged at the current 3.5% to 3.75% a year. As even suggestions emerged to delete language indicating an accommodative monetary policy stance from the policy statement, expectations for a benchmark rate cut diminished.
Jo Yong-gu, a researcher at Shinyoung Securities, said, "Several advanced economies recently held monetary policy meetings, and many interpret that the likelihood of rate cuts has diminished more than expected," adding, "Concerns about the benchmark rate fed into higher Treasury yields."