US Treasury yields rise as oil prices rally, 30-year hits 2004 high
The 30-year Treasury yield hit its highest level since mid-May 2004 and 10-year yields touched their highest since mid-June 2007 before paring gains. Traders raised bets on another 25-basis-point Fed hike in October to 68% from 64% as US crude rose about 2%.
October 25 basis-point Fed hike bets rise to 68% chance from 64%, CME FedWatch tool shows 30-year Treasury yield hits highest level since mid-May 2004 before paring gains US crude oil futures rise about 2% after Trump rejects Iranian Strait of Hormuz proposal By Sinéad Carew Sept 28 (Reuters) — US Treasury yields rose on Monday as oil prices rallied after US President Donald Trump rejected a peace proposal from Iran, fanning fears that inflation would stay higher for longer and prompt more Federal Reserve interest rate increases.
Yields on 30-year Treasury bonds hit their highest levels since mid-May 2004, while 10-year Treasury yields touched their highest since mid-June 2007 before paring gains. US crude oil futures were up about 2% after Trump said on Saturday that he had rejected an Iranian proposal to reopen the Strait of Hormuz and end fighting in the Middle East. With that, traders increased bets that the Federal Reserve will raise interest rates by another 25 basis points in October to a 68% probability from 64% on Friday, and added to bets for another rate hike in December, according to CME Group's FedWatch tool.
"Oil prices are up again after the Middle East ceasefire offer was rejected by Trump. There's likely going to continue to be upward pressure on bond yields as long as the Iran conflict uncertainty is out there," said Lawrence Gillum, chief fixed income strategist for LPL Financial. "Higher oil prices are going to lead into future inflation reports. " But while traders are betting on as many as four more hikes in the next year, Gillum said he expects inflation is going to slow in the next year and that "some of the pricing is too aggressive".
238%. 552% shortly after the US stock market opened with all three major indexes losing ground. 912%. 7 basis points.
While Monday morning was quiet on the economic data front, investors are waiting for August's Personal Consumption Expenditures report, due out on Wednesday, and September's non-farm payrolls report on Friday. com)