Global Weekly Fixed Income Report - August 21, 2026

US Treasuries

This was a bear flattening driven by two unrelated forces arriving on consecutive days. The front and bellysold off — the 3-year 6 basis points to 4.31%, the 2-year and 5-year 5 each to 4.24% and 4.43% — while the 20-year fell 5 to 5.25% and the 30-year 4 to 5.27%. 2s10s narrowed 3 basis points to 50 and 10s30s 6 to 53.Bills were close to unchanged.

The front end moved on Wednesday's FOMC minutes. The record of the 28–29 July meeting showed officialsstill regarded a further hike as possibly necessary if inflation failed to converge on 2%, with the annual rateelevated at 3.4%. The market did not capitulate to that — September is priced at 36%, against 70% at the end of July — but a hawkish record was enough toreprice the sector that carries policy risk. We think that repricing is an overreaction to a stale document:the minutes predate a payroll contraction and two consecutive core deceleration prints.

The long end is the more consequential story, and it was not a market outcome. The 30-year touched itshighest yield since 2007 on Wednesday, which is a buyers' strike rather than an inflation view. On Thursdaythe Treasury announced it would double the size of its long-bond buybacks; the 10-year fell more than 5basis points and the 30-year 9 on the day. A debt manager that responds to a disorderly long end byabsorbing supply has revealed a reaction function, and the market now knows the level at which it activates.