Silver Price Stays Steady Amidst Hawkish Rate Hike Expectations
The XAG/USD silver price remains steady near $94.00 as oil prices ease, but investors are facing significant headwinds due to a strengthening US Dollar and surging Treasury yields.
Market expectations for an October benchmark interest rate hike have climbed to nearly 67.5%, up sharply from 55.4% a week ago and just 11% a month earlier, according to the CME FedWatch Tool.
This hawkish shift in monetary expectations has triggered a sharp sell-off in US government bonds, with the 30-year US Treasury yield surging to a high of 5.501%, its highest mark since June 2004, and the benchmark 10-year Treasury yield rising to 5.223%, touching a level not recorded since June 2007.
Economists at ING highlight that US borrowing costs have moved higher as markets respond to 'elevated energy prices and a belief that the Federal Reserve is set to tighten policy and keep interest rates higher for longer.'