US 10-Year Bond Yield Hits 5%, Highest in Nearly 3 Years, Ahead of Fed Meeting

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Summary · why it matters

The yield on the 10-year US Treasury note climbed to 5% on Monday, September 14, its highest level in nearly three years, ahead of the Federal Reserve's monetary policy meeting this week. The 10-year bond yield has since pulled back to 4.987%, up more than 1 basis point, after spiking to 5.014%, its highest level since October 2023. The 2-year bond yield rose more than 1 basis point to 4.658%, after touching its highest level since July 2024 last week, while the 30-year bond yield fell less than 1 basis point to 5.353%. The moves came after the August consumer price index report on Friday, September 11, which came in line with expectations, with headline CPI up 0.4% month on month and up 3.4% year on year, while core CPI rose 0.3% month on month and 2.4% year on year. Data from CME Group's FedWatch tool indicates the market is pricing in a 92.3% probability that the Fed will raise interest rates by 0.25% at this meeting. Jason Ware, chief investment officer of Albion Financial Group, said the rise in yields is partly due to an imbalance between supply and demand in the bond market, and he expects the market will not be unsettled by the 10-year yield moving above the 5% level.

Impact on assets 3

Others± Mixed
％United States Government Bond 10Y
US-10Y
▲ PositiveMonetaryrelevance

10-year Treasury yield climbed to 5%, highest in nearly three years, ahead of the Fed meeting with markets pricing a 92.3% probability of a 25bp rate hike.

％US Government Bond 2Y
US-2Y
▲ PositiveMonetaryrelevance

2-year yield rose above 4.658% to its highest since July 2024 amid expectations of a Fed rate hike this week.

Off-coverage companies 1

Albion Financial Groupi
Private± Mixedrelevance