10-year Treasury yield rises to highest since 2007 as Fed rate-hike expectations rise — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- 10-year Treasury yield rose to 5.025% early Tuesday, marking its highest level since 2007 as U.S. government debt saw intensified selling pressure.
- Federal Reserve begins a two-day policy meeting Tuesday, with markets anticipating a 25 basis point rate hike due to August inflation remaining above the central bank’s 2% target.
- Traders are pricing in a more than 92% chance of a quarter-point rate increase at the Fed’s current meeting, according to the CME FedWatch tool.
- Jonathan Liang, Standard Chartered's CIO of fixed income and FX, stated that 10-year Treasury yields remain highly sensitive to inflation expectations, a link he expects to persist.
Why it matters: With the 10-year yield at a 16-year high and a rate hike nearly priced in, borrowers face higher financing costs immediately, while the Fed’s next move risks further tightening financial conditions just as inflation proves sticky. The 92% probability reflects minimal uncertainty, leaving little room for dovish surprises.
Ask SkimNews
