Rate Hike Looms as Bond Market Sell-Off Drives Treasury Yields to 19-Year High

The bond market sell-off is putting pressure on the Federal Reserve's monetary policy meeting this week. The central bank is expected to raise its benchmark interest rate for the first time since 2023, with a 92% chance of a rate hike predicted by CME FedWatch.

Traders are pricing in an increase of a quarter point, and Chairman Kevin Warsh's remarks will be closely scrutinized. If the Fed stands pat and holds rates steady, it could accelerate the bond market sell-off that's pushed up yields in recent weeks, analysts say.

The 10-year Treasury yield has risen to its highest level in 19 years, with concerns about inflation driving the increase. The yield rose on Tuesday, hitting a multi-year high.