Treasury Yields Back on the Rise
The yield on the US 10-year Treasury note rose again on Friday, topping 5.2% to reach a fresh high since mid-2007, extending a sharp sell-off over the previous three sessions that had pushed the benchmark yield up by 23 basis points. Traders refocused on hawkish comments from Fed officials, while a lack of concrete progress in US-Iran negotiations to end the conflict continued to fuel concerns about inflation. Meanwhile, the University of Michigan’s consumer sentiment survey confirmed a sharp rise in inflation expectations in September. Strong US economic data, worsening fiscal conditions and rising government debt have also weighed on the Treasury market while efforts by Treasury Secretary Bessent to cap long-dated yields through increased Treasury buybacks are widely seen as having had limited impact. Investors currently expect the Fed to raise the federal funds rate by 25bps next month, with the probability of such a move standing at around 66%.
2% to reach a fresh high since mid-2007, extending a sharp sell-off over the previous three sessions that had pushed the benchmark yield up by 23 basis points. Traders refocused on hawkish comments from Fed officials, while a lack of concrete progress in US-Iran negotiations to end the conflict continued to fuel concerns about inflation. Meanwhile, the University of Michigan’s consumer sentiment survey confirmed a sharp rise in inflation expectations in September.
Strong US economic data, worsening fiscal conditions and rising government debt have also weighed on the Treasury market while efforts by Treasury Secretary Bessent to cap long-dated yields through increased Treasury buybacks are widely seen as having had limited impact. Investors currently expect the Fed to raise the federal funds rate by 25bps next month, with the probability of such a move standing at around 66%.