US 10-Year Bond Yields Trade Above 5%
Anticipation of the US interest rate decision amid expectations of holding rates steady, while purchases by allied countries of US bonds have dropped sharply, especially by Japan and South Korea, reflecting a decline in reliance on US debt.
Translated by Qiyas from الجريدة — Original source
Ten-year U.S. Treasury yields traded above 5% in anticipation of the interest rate decision later today, as markets focused on the Federal Reserve’s meeting on Wednesday regarding its key interest rates. Despite inflation remaining elevated over recent months, expectations point to rates being held steady, amid concerns that the U.S.-Israeli war with Iran has sharply driven up oil and natural gas prices.
Purchases of U.S. Treasury bonds by countries closely aligned with the United States fell by more than 60% during the first eight months of 2026, a shift reflecting a declining reliance by international investors on U.S. debt as an automatic destination for their financial surpluses.
According to Bloomberg, net purchases of medium- and long-term Treasury bonds by these countries totaled $174.3 billion, the lowest level for the same period since 2021.
The sharpest decline occurred in Asia. Japan, the largest foreign holder of U.S. bonds, saw its net purchases plunge 99% to just $389 million. Meanwhile, South Korea sold $23.8 billion in bonds, marking the largest net sale recorded for this period since data collection began in 1977.
