U.S. 10-year Treasury Yield Breaks Above 4.8%, Highest in About Three Years

[Financial News]  

The U.S. 10-year Treasury note yield broke above 4.8% intraday on the 2nd local time, reaching its highest level in about three years.
Yields on major government bonds have continued to rise as concerns over inflation triggered by the Iran war have compounded fiscal deficits in countries around the world.
The 10-year yield, which serves as a benchmark for various financial products ranging from mortgages and auto loans to credit cards, surged to 4.818% on the day, its highest level since early November 2023. It later eased slightly to 4.796%, falling back to a level similar to the previous day’s.
The 30-year yield, a benchmark for long-term interest rates, was little changed at 5.267%.
The two-year yield, which reflects market expectations for Federal Reserve System (Fed) interest rates, fell 0.008 percentage points to 4.386%.
According to CNBC, AJ Bell Head of Markets Dan Coatsworth noted in an analysis note, "Investors are now watching the situation closely, staring wide-eyed at the inflation monster." He added, "Without some form of response, inflation risks becoming increasingly intense." He continued, "Central banks typically raise interest rates to combat inflation, and market expectations for the scale of rate hikes continue to evolve."
Coatsworth explained, "The bond market has now reached a point where certain investors want to lock in the high yields triggered by recent market volatility." He added, "What is holding them back, however, is the expectation that yields could rise much further if interest rates climb sharply and rapidly. This means some bond investors may be engaged in a waiting game before committing substantial funds."
Yields on 10-year government bonds in Germany, the United Kingdom, France, and Japan also all weakened.
Meanwhile, New York stocks rebounded as government bond yields, after breaking through their highest level in about three years, stabilized again. The three major indexes are each up around 0.4%.


[email protected] Song Kyung-jae Reporter