CoinDesk
U.S. Treasury yields hit 12-month highs on Friday after hotter-than-expected April CPI and PPI prints pushed traders to rapidly reprice the Federal Reserve's path. The two-year yield — the most policy-sensitive maturity — climbed to 4.05% in Asian trading, the level last seen in June 2025, up 13 basis points on the week and more than 65 basis points since March. The benchmark 10-year yield jumped to 4.5%, also the highest since May last year.
Why it matters
The repricing has been sharp. CME FedWatch now shows investors pricing a 44% probability of a Fed rate hike by December, versus just 22.5% a week ago and expectations at the start of the year for at least two cuts before end-2026. With the funds rate already in the 3.50%–3.75% range, the move in the two-year implies the bond market is now openly debating another 25-basis-point tightening rather than further easing — a stance at odds with President Donald Trump's repeated calls for borrowing costs as low as 1%. The Fed under Chair Jerome Powell has so far resisted that political pressure, and attention is already drifting toward Trump's preferred successor Kevin Warsh, viewed as more amenable to aggressive cuts.
Market impact
For Bitcoin, the math is straightforward: capital parked in BTC is competing against a risk-free asset now yielding meaningfully more in dollar terms, and Treasuries also serve as collateral across repo, bank balance sheets and broader funding markets — embedding them deeper into global liquidity than any non-yielding asset can offset. Bitcoin is trading near $81,000, essentially flat on the day but still below its 200-day simple moving average just above $82,000, a level a decisive reclaim would frame as the first credible signal of a return to a bullish long-term trend. Gold is down 0.7% at $4,614, mirroring the pressure. On the other side of the trade, tokenized Treasury protocols have pushed total on-chain value to a record above $15 billion per rwa.xyz — the cleanest beneficiary of a higher-for-longer yield regime.
Frequently asked questions
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Why are Treasury yields rising and what does it mean for Bitcoin?
April CPI and PPI came in hotter than expected, pushing traders to price a 44% chance of a Fed rate hike by December versus 22.5% a week ago. Higher yields raise the opportunity cost of holding non-yielding assets like Bitcoin against a 4.05% two-year note, pressuring BTC below its 200-day SMA near $82,000.
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What levels did the 2-year and 10-year Treasury yields hit?
The two-year yield rose to 4.05% in Asian trading and the benchmark 10-year yield jumped to 4.5% on Friday — both the highest levels since mid-2025. The two-year is up 13 basis points on the week and more than 65 basis points since March.
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How does the FedWatch tool reflect the shift in rate expectations?
CME FedWatch now assigns more than a 44% probability to a Fed rate hike by December, up from 22.5% a week ago. At the start of the year, traders had been pricing at least two rate cuts before the end of 2026 — a near-complete reversal of the consensus path.
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How are tokenized Treasuries benefiting from higher yields?
Rising yields are driving demand for on-chain access to yield-bearing government debt. According to rwa.xyz, the total value locked in tokenized Treasury protocols has hit a record above $15 billion, making them the cleanest beneficiary of the higher-for-longer regime.
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What is Bitcoin's 200-day simple moving average and why does it matter?
The 200-day SMA smooths roughly seven months of price action and is widely watched as a long-term trend indicator. Bitcoin is currently trading near $81,000, below its 200-day SMA just above $82,000 — a decisive reclaim would be read by traders as a potential confirmation of a return to a bullish long-term trend.
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