Yield on 10-year Treasury hovers above 5% as investors await Fed decision — SkimNews
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- U.S. Treasury yields were little changed Wednesday morning, with the benchmark 10-year at 5.004%, the 20-year at 5.409%, and the 30-year at 5.372%, after the 10-year hit a post-2007 high on Tuesday.
- The Federal Reserve's FOMC is set to announce its monetary policy decision at 2 p.m. ET Wednesday, with fed funds futures pricing a 92.5% chance of a quarter-point hike — up from 33% a month ago.
- August inflation data showed a 3.4% U.S. annual rate, while the Fed's preferred PCE price index rose 3.7% year-over-year in July, and oil prices remain above $100 per barrel.
- Brent Wilsey, CIO of Wilsey Asset Management, warned a Fed hold would surprise markets and damage the central bank's credibility, "reigniting concerns that the central bank is caving to political pressure to keep rates steady."
- Jonathan Pryor, co-head of FX dealing at Marex, said the Fed is "moving into a new phase of monetary policy," reversing earlier expectations of a six-to-twelve-month rate-cutting cycle.
- The Trump administration has repeatedly pressured the Fed to lower rates.
Why it matters: The Fed is boxed in: hiking despite White House demands to cut risks pushing the 10-year — already at post-2007 highs — even higher, while a hold would signal political capitulation and destabilize equity markets that have priced in a quarter-point hike at near-certain odds.
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