Treasury Yields Surge as Fed and BoJ Tighten Amid Inflation Worries
US Treasury yields rose significantly on Friday, reaching near 5% after the Federal Reserve increased interest rates on Wednesday. The 10-year Treasury yield climbed by more than six basis points to 5%, remaining below Tuesday's high of 5.041%. This is its highest level since 2007.
The Bank of Japan also joined other major central banks in tightening policy, raising its policy rate by 25 basis points to 1.25% in a 7-2 vote. The Fed delivered a matching 25 basis point increase in a unanimous decision, its first rise in three years, and reiterated that inflation remains above its 2% target.
Oil prices also moved higher due to uncertainty around the Middle East conflict, adding to concerns about upside inflation pressure. With the probability of an October hike at 55% and December at 90%, traders are preparing for further tightening.