To The Moon

US Treasury yields remained flat on Tuesday as market participants held off on major moves, awaiting a fresh batch of economic data to gauge the health of the American economy. The yield on the 10-year Treasury, a key benchmark for mortgages, auto loans, and credit card debt, was unchanged at 4.7021%. The 30-year long bond yield also stayed put at 5.2297%, while the 2-year yield, which typically tracks the Federal Reserve's short-term rate decisions, held steady at 4.2421%. For context, one basis point equals 0.01%, and bond yields move inversely to prices.

In terms of live quotes on major Treasury products, the US 10-year yield (US10Y) sat at 4.70%, down 0.004 basis points. The US 1-month yield (US1M) ticked up 0.012 basis points to 3.713%, while the US 1-year yield (US1Y) rose 0.01 basis points to 4.036%. The US 2-year yield (US2Y) was flat at 4.236%, and the US 30-year yield (US30Y) slipped 0.002 basis points to 5.229%. Meanwhile, the US 3-month yield (US3M) edged up 0.002 basis points to 3.805%, and the US 6-month yield (US6M) gained 0.013 basis points to 3.936%.

The calm session followed a volatile Monday in borrowing costs, triggered by comments from two senior US Treasury officials indicating that the department may tap into its nearly $1 trillion Treasury General Account (TGA) to fund an expanded bond buyback program. However, the officials did not specify how much of the TGA balance would be allocated to the repurchase operations. The bond market has been under the spotlight ever since Treasury Secretary Scott Bessent unveiled the buyback plan last week.

Investors are now turning their attention to Friday, when Fed Chair Kevin Warsh is slated to deliver the keynote address at the Jackson Hole global central bank symposium. "There's no question that the tone of the Fed Chair's speech will echo the style of the previous two FOMC meetings; the policy vacuum left in guiding market expectations after Jerome Powell's departure remains a tangible reality," said Mabrouk Chetouane, head of global market strategy at Natixis Investment Management. "As such, this year's symposium address could disappoint the market, or even exacerbate volatility in the long-end yield curve, which is already under immense pressure."

Meanwhile, the July Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, along with the second-quarter GDP estimate, are scheduled for release on Wednesday. Investors are scrutinizing these figures to assess the economic landscape. Before that, later on Tuesday, the US is set to publish the weekly ADP private payrolls change data and new home sales figures.