U.S. 30-Year Treasury Yield Surges to 5.46%—Highest in 22 Years as Bond Market Fears Tightening

【Financial News, New York—Correspondent Byung-chul Lee】  The 10-year U.S. Treasury yield broke above 5.16%, surging to its highest level since 2007. The 30-year yield also reached its highest level since 2004. Selling in the bond market has intensified as concerns over inflation fueled by stronger-than-expected U.S. economic growth and high oil prices have combined with Federal Reserve officials repeatedly leaving the possibility of further rate hikes open.
On the 24th, local time, the 10-year U.S. Treasury yield rose more than 4 basis points from the previous session to 5.162% during trading. It was the highest level since July 2007. The 30-year yield also climbed 5 basis points to 5.456%, its highest level since 2004. The two-year yield, which is sensitive to monetary policy, rose to 4.908%.
The direct catalyst for the rise in Treasury yields was the possibility of further tightening by the Fed. According to the CME FedWatch Tool, the interest-rate futures market reflected a more than 75% probability that the Federal Open Market Committee (FOMC) would raise its policy rate again in October. That was sharply higher than approximately 49% just a week earlier.
Comments from Fed officials also pushed yields higher. Federal Reserve Governor Michael S. Barr said that “additional policy adjustment” might be necessary to bring inflation down to its target level. John Williams, president of the Federal Reserve Bank of New York, also said in London that day that it was “reasonable” to expect one additional rate hike by the end of this year.




[email protected] Correspondent Byung-chul Lee Reporter