The beginning of this week witnessed the 10-year yield surpassing 5% for the first time since 2007, driven by Fed Chair Powell's comments last Thursday and ongoing geopolitical turbulence. However, by mid-Monday morning, the 10-year yield was on its way back down to around 4.85. This fall in yields was mostly due to news of short covering in the treasury market. With no scheduled Fed speakers this week and little economic data, treasury markets traded in a slight range until Wednesday afternoon when we saw the circus of electing a new Speaker of the House finally be resolved. With the speakership issue resolved, investors can now anticipate greater clarity regarding the government's forthcoming spending plans and the consequent borrowing. 

Thursday morning saw GDP come in at 4.9% which is the highest print in 2 years and 4-tenths better than the estimated 4.5% for the quarter. The GDP print is another example of how the American consumer continues to spend and is a likely indicator that higher rates for longer is a real possibility. Even with the upside surprise in GDP yields have begun to tumble back down to that 4.85 support level.

A strong treasury auction as investors look for safety from geopolitical turmoil going into the weekend seems to be the culprit for the downward pressure on yields. With the growing narrative of higher rates for longer and the ongoing geopolitical pressures, you can expect the volatility to persist.