US 10-Year Treasury Yield at 5.35%
The yield on the US 10-year Treasury note jumped to 5.35% on Thursday, a new high since 2002, resuming its upward trend and rising for a second consecutive session. The move was driven by renewed gains in oil prices, which are fueling additional inflationary pressures and, consequently, increasing expectations of further Fed tightening. Minutes from the Fed’s September meeting showed that most policymakers expect another increase in the federal funds rate this year, although the timing remains uncertain. Fed Governor Waller said on Thursday that additional rate hikes will likely be needed to bring inflation back to target, while emphasizing that there is “flexibility” around the pace of increases. Markets currently price an around 81% probability of the Fed holding rates steady in October, while the odds of a 25bps hike in December stand at around 71%. Meanwhile, today’s 30-year Treasury auction will provide a further test of demand for longer-dated government debt.
35% on Thursday, a new high since 2002, resuming its upward trend and rising for a second consecutive session. The move was driven by renewed gains in oil prices, which are fueling additional inflationary pressures and, consequently, increasing expectations of further Fed tightening. Minutes from the Fed’s September meeting showed that most policymakers expect another increase in the federal funds rate this year, although the timing remains uncertain. Fed Governor Waller said on Thursday that additional rate hikes will likely be needed to bring inflation back to target, while emphasizing that there is “flexibility” around the pace of increases.
Markets currently price an around 81% probability of the Fed holding rates steady in October, while the odds of a 25bps hike in December stand at around 71%. Meanwhile, today’s 30-year Treasury auction will provide a further test of demand for longer-dated government debt.