US 10-Year Yield Surges
The yield on the 10-year US Treasury note rose above 5.05% on Thursday, extending its recent increase to a three-week high on expectations that the Federal Reserve will deliver multiple rate hikes in the current tightening cycle. CPI data released earlier in the week showed that both headline and core consumer prices rose more than expected in October, indicating that the surge in energy prices from the war in Iran was being transmitted to other sectors of the economy. Markets consequently piled into rate futures pricing in a Fed rate hike in December and two similar moves next year. Meanwhile, Treasury yields in the belly of the curve surged after Jensen Huang resigned as president and CEO of Nvidia, sparking fears of turmoil in the debt-laden AI sector. Because Nvidia has anchored and backstopped a massive wave of AI-related corporate bond issuance, a sudden freeze in the sector's credit activity risked triggering broader fixed-income selloffs as investors raised cash.
The yield on the 10-year US Treasury note rose above 5.05% on Thursday, extending its recent increase to a three-week high on expectations that the Federal Reserve will deliver multiple rate hikes in the current tightening cycle. CPI data released earlier in the week showed that both headline and core consumer prices rose more than expected in October, indicating that the surge in energy prices from the war in Iran was being transmitted to other sectors of the economy. Markets consequently piled into rate futures pricing in a Fed rate hike in December and two similar moves next year.
Meanwhile, Treasury yields in the belly of the curve surged after Jensen Huang resigned as president and CEO of Nvidia, sparking fears of turmoil in the debt-laden AI sector. Because Nvidia has anchored and backstopped a massive wave of AI-related corporate bond issuance, a sudden freeze in the sector's credit activity risked triggering broader fixed-income selloffs as investors raised cash.