The U.S. Treasury market suffered its worst selloff since 2022 this week, with 10-year yields surging 38 basis points to 4.89% – the highest level since November 2024. The dramatic move was driven by:

• Hotter-than-expected inflation: March CPI rose 3.7% YoY vs 3.4% forecast
• Fed policy recalibration: Markets now price just one 2025 rate cut vs three previously
• Auction pressures: Poor demand for $58B 3-year notes at 1.7x bid-to-cover

“The bond market is repricing the entire Fed trajectory,” said BlackRock’s Rick Rieder.

Key impacts:
✓ Mortgage rates jumped to 7.25%
✓ Corporate borrowing costs rose 0.5%
✓ Gold plunged 3.2% as haven flows reversed

Analysts warn the selloff may continue until:
→ April PCE data shows inflation cooling
→ Fed provides clearer forward guidance
→ Foreign buyers return at these yield levels