US 10-Year Treasury Yield Back Above 5%
The yield on the US 10-year Treasury note jumped above 5% on Wednesday, returning to 2007 highs, after stronger-than-expected PMI data for the US fueled expectations of further Fed rate hikes. Preliminary S&P Global data showed private-sector activity expanding at its fastest pace in more than five years in September, with both services and manufacturing improving. The survey also showed employment rising at its fastest pace since 2022, alongside renewed inflationary pressures. Meanwhile, comments from several Fed officials have been interpreted as more hawkish. Traders are now pricing in a nearly 60% chance of another 25 bps rate hike next month, following last week’s increase, while the odds of another move in December stand at around 48%. In addition, oil prices remained volatile as traders awaited further diplomatic developments between the US and Iran aimed at ending the conflict.
The yield on the US 10-year Treasury note jumped above 5% on Wednesday, returning to 2007 highs, after stronger-than-expected PMI data for the US fueled expectations of further Fed rate hikes. Preliminary S&P Global data showed private-sector activity expanding at its fastest pace in more than five years in September, with both services and manufacturing improving. The survey also showed employment rising at its fastest pace since 2022, alongside renewed inflationary pressures. Meanwhile, comments from several Fed officials have been interpreted as more hawkish.
Traders are now pricing in a nearly 60% chance of another 25 bps rate hike next month, following last week’s increase, while the odds of another move in December stand at around 48%. In addition, oil prices remained volatile as traders awaited further diplomatic developments between the US and Iran aimed at ending the conflict.