US Treasury Yield Surges to Fresh 24-Year High Amid Hawkish Fed
The US Treasury yield has reached its highest level in over two decades, hitting a fresh 24-year high. The 10-year yield rose to 5.340% on Thursday, its highest point since 2002, after a session low of 5.270%. This surge comes amid rising global oil and fuel prices, which are contributing to inflationary pressures on Federal Reserve policymakers.
The increase in Treasury yields is also influenced by the strong US economic data released recently, as well as the Federal Reserve's hawkish stance. Federal Reserve Governor Lisa Cook emphasized that inflation had remained too high for too long and that the Fed remains committed to returning inflation to its target while maintaining a strong labor market.
Markets are awaiting Friday's US employment report for September to reassess expectations for another interest rate hike before the end of the year. The CME FedWatch Tool indicates that the probability of a 25-basis-point rate hike at the next Federal Reserve meeting stands at 38% and 90% for the December meeting.
The rise in oil prices, which exceeded 2% on Thursday, is also contributing to inflationary pressures. This increase has led to concerns over the security of global supplies from the Middle East and signs of diesel shortages across major economies.