US 30-Year Bond Yield Hits 24-Year High of 5.613%

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The yield on the 30-year US Treasury bond climbed to a 24-year high today amid inflation concerns and expectations of Federal Reserve interest rate hikes. The 30-year yield, which typically responds to geopolitical risk, jumped to 5.613%, its highest level since 2002. Meanwhile, the 10-year yield, the main benchmark for setting rates on mortgages, auto loans and credit card debt, rose to 5.285%. The 2-year yield, which tends to move in line with the Fed's policy rate decisions, was little changed at 4.922%. The latest CME Group FedWatch Tool indicates that investors are pricing in a 70.3% probability that the Fed will raise rates at its October meeting and a 94.9% probability of a hike at the December meeting. Investors are watching several economic data releases this week, especially the August personal consumption expenditures price index, an inflation gauge the Fed prioritizes, due on Wednesday. Analysts expect headline PCE to rise 3.7% year on year and 0.4% month on month, while core PCE is expected to rise 3.4% year on year and 0.3% month on month. The US Labor Department will release September nonfarm payrolls on Friday, October 2, with analysts expecting job growth of 98,000, down from 162,000 in August, and the unemployment rate holding steady at 4.1%.

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