Treasury Yields Rebound Ahead of Fed Minutes — SkimNews
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- U.S. Treasury yields rebounded Monday after a sharp selloff that drove them lower last week, with the benchmark 10-year yield rising roughly 2 basis points to 5.298% and the 30-year yield climbing 3 basis points to 5.659%
- The 2-year Treasury yield moved in the opposite direction, falling nearly 1 basis point to 4.818%, a divergence that steepened the yield curve
- Institute for Supply Management data showed its September services-sector PMI rose to 54.9, roughly in line with expectations but slightly below August's pace of growth
- The ISM services price index jumped 1.4 points to 74, pushing its 12-month average to the highest since March 2023 and flagging pricing pressure inside the services economy
- Investors are positioning ahead of Federal Reserve September meeting minutes due Wednesday, the next major catalyst after Friday's lackluster jobs report
- CME Group's FedWatch tool shows traders pricing in an 82% implied probability the Fed holds rates steady at its October meeting
Why it matters: The ISM services price index rising to 74 — with its 12-month average at the highest since March 2023 — poses a direct challenge to the dovish case the market built after Friday's weak jobs report. With an 82% hold probability already priced in, the September minutes risk exposing divisions over whether sticky services inflation or cooling labor demand drives the Fed's next move.
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