US Treasury Yield Spikes to 19-Year High Amid Strong Economic Growth
The US Treasury yield spiked to a 19-year high on Wednesday after a series of economic indicators pointed to strong growth, prompting investors to bet on further interest rate hikes from the Federal Reserve.
The 10-year Treasury note yield jumped more than 13 basis points to 5.104%, reaching its highest level since July 2007, as traders increased their expectations for another quarter-point rate increase in October.
A strong September reading on the services purchasing managers' index (PMI) from S&P Global caught investors off guard, with the index jumping to 58.7, its highest level in nearly five years. The manufacturing counterpart also rose to 56.7, a level not seen in more than four years.
Fed Governor Michael Barr added to the upward pressure on yields by stating that further policy adjustments would be needed to ensure inflation comes down to target in a timely fashion.