U.S. 10-Year Treasury Yield Hits 19-Year High... "Fed to Hike Rates Again in October"

[Financial News]  

U.S. interest rates are stirring again. After remaining subdued for some time, rates surged once more on the 23rd (local time). 
The 10-year U.S. Treasury yield, a global benchmark interest rate, soared 0.153 percentage points from the previous session to 5.12%. It was the highest level in 19 years, since July 2007.
The 2-year Treasury yield, which reflects financial markets' expectations for the Fed's interest-rate policy, also jumped 0.126 percentage points to 4.903%. It rose to its highest level in more than two years, since May 2024.
The 30-year yield, a benchmark for long-term interest rates, rose 0.101 percentage points to 5.404%.
As the 10-year Treasury yield climbed, 30-year fixed mortgage rates, which move in line with it, also surpassed 7% that day.
According to the Mortgage Bankers Association (MBA), the average contract rate for 30-year fixed mortgages in the third week of September jumped 0.15 percentage points from the previous week to 7.12%. This was the highest level in more than two years, since May 2024.
Mortgage rates have risen by more than 1 percentage point since February 28, when President Donald Trump launched the war in Iran.
Financial markets view it as almost certain that the Fed will deliver an additional 0.25-percentage-point rate hike at the Federal Open Market Committee (FOMC) meeting on the 27th and 28th of next month.
According to CME Group's CME FedWatch Tool, the futures market estimates a 70.9% probability that the Fed will raise its benchmark interest rate by 0.25 percentage points at the October FOMC meeting. A month ago, that probability was just 8.8%, and even a day earlier, it stood at only 55.4%. If the additional hike goes ahead, the Fed's target range will rise to 4.0%–4.25%.
The three major New York stock market indexes all fell amid expectations of an additional rate hike.

[email protected] Song Kyung-jae Reporter