US 10 Year Treasury Note Yield Above 5.2%
The yield on the US 10-year Treasury note continued to climb at the start of the week, rising above 5.2% to reach new high levels since mid-2007. Oil prices resumed their upward trend amid a lack of progress in negotiations between the US and Iran to end the war and reopen the Strait of Hormuz. The renewed inflationary concerns have strengthened expectations of further Fed tightening, with traders now pricing in nearly a 65% probability of a 25bps rate hike next month and a 53% chance of a similar move in December. Meanwhile, investors are bracing for a busy week of key economic releases, including the PCE inflation report and the jobs report, which should provide further insight into the health of the US economy and help shape expectations for the Fed’s next policy moves. Strong economic data, deteriorating fiscal conditions and rising government debt in the US have also weighed on the Treasury market in recent weeks.
2% to reach new high levels since mid-2007. Oil prices resumed their upward trend amid a lack of progress in negotiations between the US and Iran to end the war and reopen the Strait of Hormuz. The renewed inflationary concerns have strengthened expectations of further Fed tightening, with traders now pricing in nearly a 65% probability of a 25bps rate hike next month and a 53% chance of a similar move in December.
Meanwhile, investors are bracing for a busy week of key economic releases, including the PCE inflation report and the jobs report, which should provide further insight into the health of the US economy and help shape expectations for the Fed’s next policy moves. Strong economic data, deteriorating fiscal conditions and rising government debt in the US have also weighed on the Treasury market in recent weeks.