U.S. Treasury yields rise across the board on higher oil prices and inflation concerns; 10-year yield at 5.15%

[Financial News] U.S. Treasury yields rose across the board amid concerns about inflation (rising prices) and the fallout from higher global oil prices. With producer-price inflation reaching its highest level since 2022, concerns have grown that price pressures could persist as geopolitical tensions continue in the Middle East and between Russia and Ukraine.
According to U.S. financial news outlet CNBC on the 19th (local time), the yield on the U.S. 10-year Treasury rose by more than 4 basis points (1 bp = 0.01 percentage point) from the previous trading day to 5.146%. The 30-year Treasury yield also rose by at least 4 basis points to 5.478%, while the 2-year yield, which is sensitive to the monetary policy of the Federal Reserve System (Fed), climbed by more than 3 basis points to 4.772%.
The main driver of the rise in yields is the high rate of inflation in the United States. U.S. producer prices in September, reported last week, rose 6.3% from a year earlier, the largest increase since 2022. Consumer prices also rose 3.7% that month, exceeding market expectations.
Rising global oil prices also stoked inflation concerns. As tensions continued in the Middle East, Russia and Ukraine attacked each other's energy facilities, heightening concerns about disruptions to crude oil supplies. On the day, November-delivery futures for West Texas Intermediate (WTI) crude oil closed at $103.66 a barrel, up 2.22% from the previous trading day.
If oil prices remain high, rising energy costs could spread across prices generally, constraining the possibility of further Fed rate cuts or fueling concerns that monetary tightening could last longer.
However, markets are leaning toward the Fed holding rates at their current level rather than raising them again immediately. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, investors put the probability of the benchmark rate being held steady at 80% or higher at the Federal Open Market Committee (FOMC) meeting on the 28th.
[email protected] Hong Chae-wan Reporter