The sharp rise in long-term US Treasury yields has triggered mortgage-related hedging, adding selling pressure to an already strained bond market. However, the impact is likely to be smaller than during previous selloffs, according to a report by Reuters.
Benchmark 10-year Treasury yields have climbed about 130 basis points since late February, while 30-year yields have risen 100 basis points. The increase has been driven by a surge in oil prices following the war in the Middle East, fuelling expectations that the Federal Reserve could raise interest rates multiple times over the next 12 months, the report stated.
