US Treasury yields rise as TIPS challenge the inflation narrative
US Treasury yields have risen sharply since early March, with 30-year yields hitting their highest level since 2007 and markets pricing a 63% chance of a September Fed hike. The sell-off has been widely linked to oil-driven inflation fears, but TIPS data points elsewhere: five-year breakeven inflation has fallen since May, while nominal yields rose mainly because real yields increased and expected inflation declined. That suggests the market is pricing higher real returns rather than a new inflation spiral. For crypto, higher real yields make non-yielding assets like Bitcoin less attractive. The impact could still vary: Treasury selling tied to FX reserve liquidation may have little direct crypto effect; an oil shock that triggers recession and credit tightening would be bearish; and stronger demand for capital from AI-related investment, alongside heavy bond issuance, could also compete with crypto for liquidity.
