10-Year US Treasury Yield Hits 5.058%, Highest Since 2007
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
On Wednesday, US Treasury yields surged to multi-year highs after stronger-than-expected services and manufacturing data fueled market concerns about further Federal Reserve interest rate hikes. The 2-year Treasury yield rose 8 basis points to 4.464%, while the benchmark 10-year yield climbed 7 basis points to 5.058%, its highest level since July 2007. The 30-year yield increased over 4 basis points to 5.347%. The S&P Global Services PMI jumped to 58.7 in September, the highest in nearly five years, and the Manufacturing PMI rose to 56.7, a four-year high. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, noted that US business activity continues to boom, with the latest improvement being the largest recorded since early 2015, excluding the post-COVID reopening surge. However, he added that input costs rose at the fastest pace in four years due to surging fuel and transport costs. Further boosting yields were comments from Federal Reserve Governor Michael Barr, who said further rate hikes may be necessary as risks to achieving the inflation target have increased. The Fed raised its benchmark rate last week due to persistent energy-driven inflation. According to the CME FedWatch Tool, the probability of a 25-basis-point rate hike in October rose to 64% on Wednesday from 55% on Tuesday, up from under 10% a month ago.
Source report
Wednesday saw a sharp rise in US Treasury yields after newly released services and manufacturing data intensified market concerns over further interest rate hikes by the Federal Reserve.
The 2-year Treasury yield jumped 8 basis points to 4.464%. The benchmark 10-year Treasury yield rose 7 basis points to 5.058%, a level not seen since July 2007. The 30-year Treasury yield increased more than 4 basis points to 5.347%.
A basis point equals 0.01%. Yields move inversely to prices.
Key Economic Data
- S&P Global Services PMI surged to 58.7 in September, the highest level in nearly five years, up from 56.5 in August.
- Manufacturing PMI also rose to 56.7, a level not seen in more than four years.
Analyst Commentary
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, stated: "US business continues to boom."
He noted that "to better understand this growth surge, aside from the demand spike following the post-COVID lockdown economic reopening, the latest improvement in business activity is the largest recorded since early 2015. Currently, both manufacturing and services businesses are clearly booming."
However, he added: "At the same time, input costs surged in September at the fastest pace in four years, with fuel and transportation costs rising sharply due to higher oil prices."
Fed Official Remarks
Further pushing yields higher were comments from Federal Reserve Governor Michael Barr, who stated that further rate hikes may be necessary because "the risks to achieving our inflation target have increased."
The Fed raised its overnight benchmark rate last week, driven by persistently high inflation readings resulting from rising energy prices.
Market Expectations
According to the CME FedWatch Tool, the probability of another 25-basis-point rate hike in October rose to 64% on Wednesday, up from 55% on Tuesday. One month ago, that probability stood at less than 10%.
Source
新浪财经Neutral / independent
Part of this Story
US 10-Year Treasury Yield Hits 5.133%, Highest Since 2007, on Strong Data and Rate-Hike Fears