Treasury Yields Linger at Multiyear Highs on Sticky CPI — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- August CPI rose a seasonally adjusted 0.4% monthly and 3.4% over the past 12 months, matching Dow Jones consensus but remaining far above the Fed's 2% goal; core CPI posted a 0.3% monthly gain, 0.1 percentage point higher than economists forecast, with a 2.4% annual rate.
- Fed rate-hike odds for next week's meeting jumped to 90% from about 72% on Thursday, based on trading in 30-day fed funds futures at the Chicago Mercantile Exchange.
- The 2-year Treasury yield rose 2.2 basis points to 4.572% after earlier climbing almost 11 bps, making it the most short-term-rate-sensitive maturity.
- The 10-year Treasury yield dipped 3.4 bps to 4.91% after approaching 5.00%; on Thursday it jumped 11 bps to 4.954%, its highest level since October 2023.
- The 30-year Treasury yield fell 4.3 bps to 5.318% after earlier trading at 5.36%, as the long end retraced from its multiyear peak.
- The Treasury Department bought back about $5.2 billion in off-the-run 10-year notes and 20-year bonds on Thursday—roughly half of the $10.5 billion offered—adding to selling pressure on Treasuries.
- Thursday's sharp sell-off was amplified by West Texas Intermediate topping $100 a barrel amid further Middle East escalation; Friday saw WTI off 3.3% to $99.14 and Brent crude off 3.1% to $104.27.
Why it matters: With hike odds at 90% for next week's Fed meeting, the current 3.50%–3.75% policy rate likely rises a quarter point, directly lifting borrowing costs on the 10-year benchmark of roughly 4.91% that underpins mortgages, auto loans, and credit-card debt. Core inflation stuck at 2.4% annual removes any near-term case for the cuts the bond market had been pricing in earlier this fall.
Ask SkimNews
