Treasury Yields Climb as Investors Await Fed Meeting Minutes

U.S. Treasury yields rose on Monday, recovering from last week's sharp declines as investors digested fresh economic data and anticipated the release of the Federal Reserve's September meeting notes. The 10-year Treasury yield climbed about 2 basis points to 5.298%, while the 30-year Treasury bond yield increased by 3 basis points to 5.659%. Meanwhile, the 2-year Treasury yield dropped nearly 1 basis point to 4.818%.

Traders reacted to new data on service sector growth from the Institute for Supply Management (ISM), which showed the Purchasing Manager's Index growing to 54.9 in September. This was slightly below August's growth but roughly in line with expectations. The price index within the service ISM rose 1.4 points to 74, marking the highest 12-month average since March 2023.

Investors are now looking ahead to the release of the Federal Reserve's September policy meeting minutes, scheduled for Wednesday. The bond market has seen significant selloffs over the past six weeks, but a weak September jobs report on Friday helped ease concerns about another Fed rate hike in October. According to the CME Group's FedWatch tool, traders now assign an 82% probability that the Fed will keep rates unchanged at its next meeting.