US Treasuries found their footing after weeks of turbulence, with bond prices stabilizing as a key inflation gauge came in softer than Wall Street had braced for. The recovery marks a notable shift from the aggressive selloff that gripped fixed income markets when oil prices surged on Middle East tensions.
The headline CPI number for April 2026 still looked ugly: 3.8% year-over-year, up from 3.3% in March. But peel back the energy layer, and the picture gets more interesting. Core CPI, which strips out volatile food and energy costs, held at 2.8%. That’s the number the bond market actually cared about, and it was enough to stop the bleeding.
How oil broke the bond market (temporarily)
The selloff that preceded this recovery wasn’t subtle. Geopolitical tensions centered on Iran and potential disruptions around the Strait of Hormuz pushed Brent crude above $100 per barrel for the first time in four years. Energy costs in the April CPI report jumped 17.9%, a figure that looks more like a commodity crisis than a normal monthly reading.
That oil shock rippled straight into Treasuries. The 10-year yield climbed above 4.5%, hitting levels not seen since early 2025. The 30-year yield briefly topped 5%.
