Treasury Yields Soar to Multi-Decade Highs Amid Hawkish Fed Bets

U.S. Treasury yields continued to rise on Thursday, reaching multi-decade highs as markets priced in a more hawkish Federal Reserve path and higher energy prices. The 10-year yield rose by 7.6 basis points to 5.24%, leaving it close to its 2007 closing peak of 5.29%. The 2-year yield also increased, rising to 4.93% for the first time since 2024.

The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.60% on Thursday, marking the highest level in about 15 years. However, Governor Michele Bullock struck a less urgent tone, highlighting slowing economic growth and easing labor-market conditions as factors that could influence future decisions.

The Australian dollar initially rallied on the decision before reversing course, with AUD/USD falling below 0.7000. The euro also faced pressure, trading near its late-July lows around 1.1350 after traders pushed back expectations for a faster ECB response.