Why did US Treasuries rise on Thursday, and what role did oil prices and inflation data play?

US Treasuries rose on Thursday primarily due to a drop in oil prices, which improved the outlook for US inflation. The decline in oil prices followed a pivotal meeting between UAE and Iranian officials—overshadowing threats from former President Donald Trump to escalate conflict by seizing Iran’s key oil hub—and contributed to bond gains that trimmed yields across maturities by two to three basis points. This oil-driven move was complicated by mixed US inflation data: May wholesale prices rose more than expected overall, but core prices (excluding energy and food) rose less than estimated—a dynamic that led market participants like Tony Farren of Mischler Financial Group to conclude 'the worst of the inflation data is in,' temporarily shifting Treasury market sentiment.

How did recent US economic data—including inflation, employment, and Fed leadership change—affect expectations for future interest rate decisions?

Recent US economic data—including stronger-than-expected May employment figures released on June 5 and mixed May inflation readings—altered market expectations for Federal Reserve policy. Although Fed officials are widely expected to hold the federal funds rate steady at 3.5%–3.75% at their upcoming meeting—the first since Kevin Warsh succeeded Jerome Powell as Fed chair—quarterly forecast revisions may reflect war-driven energy price surges. These developments have led many investors to anticipate a quarter-point rate hike by year-end and strong chances of another by mid-2027.

Treasuries Rise on Lower Oil Prices, Mixed Inflation Readings

Jun 11, 2026

US Treasury yields fell as lower oil prices improved the inflation outlook, despite higher-than-expected wholesale prices. The ECB raised rates citing energy shocks, while investors watch Fed policy amid geopolitical tensions affecting Middle East oil supply.

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