US Bond Market Hits Decade-High as Investors Bet on 66% Chance of Rate Hike

The US bond market is sounding alarm bells as the 10-year Treasury yield has reached its highest level since mid-2000, hitting 5.16% this week.

This significant increase marks a 3.29% rise on the week and a 24% jump since the start of the year, indicating that investors are pricing in more tightening from the Federal Reserve.

Traders now see about a 66% probability of a 25-basis-point Fed hike next month, driven by hawkish comments from officials and stubborn inflation signals.

The pressure isn't just about policy; strong economic data, deteriorating fiscal conditions, and a growing government debt pile are also weighing on the bond market.