US Bond Yields Reach 20-Year High Amid Inflation Concerns
U.S. bond yields have reached new heights, hitting a 20-year high amidst concerns about inflation and robust economic growth.
The 30-year US bond yield hit a fresh 22-year high, while the benchmark 10-year yield reached a near 20-year high. These jumps in long-term yields come despite another Treasury buyback operation aimed at addressing liquidity in the market.
Experts say that upbeat economic data has driven up expectations for another interest-rate increase by the Federal Reserve. The Fed raised rates last week to control inflation, which has risen due to higher fuel prices tied to the US-Israeli war with Iran. Several Fed officials have stated that additional hikes may be needed to curb growth in prices.
The recent auction of five-year notes drew weak demand, adding to the selloff in bond prices and upward pressure on yields. Next week will bring more key data for investors, including the September US payrolls report and the monthly read of the personal consumption expenditures price index (PCE), which is closely followed by the Fed.
The yield curve measuring the gap between yields on two- and 10-year Treasury notes has also climbed to 30.3 basis points, indicating economic expectations. The two-year US Treasury yield, a key indicator of interest rate expectations for the Fed, was down 3.5 basis points at 4.86 percent.