The Environmental Protection Agency on Thursday proposed rolling back emission standards for new heavy-duty trucks, including buses, garbage trucks and semis.
Under the proposal, EPA is looking to scale back warranty requirements for trucks and delay implementation of updated useful-life extensions. If finalized, this action could result in lower costs for truck manufacturers while potentially also boosting air pollution.
This is the latest effort by the Trump administration to unwind Biden-era pollution rules for vehicles and other sources. In May, the agency proposed delaying emission standards set to kick in for new light- and medium-duty cars and trucks starting with model year 2027.
Heavy-duty trucks are far more polluting than smaller cars and trucks, releasing higher levels of nitrogen oxides (NOx) that can cause shortness of breath and other respiratory problems in the short term. They also contribute to ozone and smog conditions.
Under the current rules that took effect in 2023, Biden’s EPA reduced the federal NOx limit for these trucks. It also extended the heaviest trucks’ useful life – meaning the time frame when they are expected to meet the federal limits – from 435,000 miles or 10 years to 650,000 miles or 11 years. The time period during which this class of vehicles is under warranty, meaning manufacturers are legally required to repair or replace defective emissions-related components, went from 100,000 miles or 5 years to 450,000 miles or 10 years.
Bond auction draws highest yield since 2007
An auction of 30-year Treasury bonds Thursday drew the highest yield in nearly 20 years, underscoring how swelling bond supply is driving investors to demand higher returns from government debt.
The bonds were awarded at 5.058%. While the auction result was the highest since 2007, it was lower than anticipated, suggesting that demand exceeded expectations. In pre-auction trading just before 1 p.m. New York time, the bidding deadline, the yield was 5.061%. Existing 30-year bonds have traded at yields as high as 5.20% this year.
Unlike shorter-maturity Treasury yields, which are more sensitive to changes in the Federal Reserve’s target for overnight lending rates, the 30-year bond’s yield tends to rise and fall with expectations for economic growth, inflation and the US government’s borrowing needs. There’s been upward pressure on all of those over the past year.
Long-maturity Treasury yields are likely to continue to climb particularly because of increased borrowing, not only by governments around the world but also by companies to finance artificial intelligence infrastructure, Gregory Peters, co-chief investment officer at PGIM Credit, said on Bloomberg Television. The AI spending surge has fueled more than $1 trillion of corporate borrowing this year, a near-record pace.
Mortgage rates rise to 6.49%, reversing earlier drop
US mortgage rates climbed to 6.49%, reversing last week’s drop, after President Donald Trump declared the ceasefire with Iran over, fueling concerns that renewed fighting may push up oil prices and keep borrowing costs elevated.
The average for a 30-year, fixed loan rose from 6.43% a week earlier, Freddie Mac said in a statement Thursday. The rate was 6.72% a year ago.
The war in Iran has rattled the property market since the conflict began in late February. The ceasefire had raised hopes that easing geopolitical tensions would help stabilize borrowing costs. This week’s escalation risks erasing that optimism.
“Stubbornly high mortgage rates are a big part of what’s holding buyers back from making 2026 a major improvement over the past few years of home sales, and the current situation in Iran may keep them higher for longer,” said Joel Berner, a senior economist at Realtor.com.
Sales of previously owned US homes fell in June, with contract closings declining 2.4%, the National Association of Realtors reported Thursday.
Compiled from Bloomberg reports.