US Treasury Yields Climb as Global Central Banks Tighten

The US 10-year Treasury yield has returned to 5% after the Federal Reserve's decision to increase interest rates. The Bank of Japan also joined the tightening wave by raising its interest rate to 1.25%, its highest level in 31 years.

The Fed's hike on Wednesday was unanimous, with inflation being a major concern as it remains well above the 2% target. The yield on the US 10-year Treasury note has climbed over six basis points and is now at 5%, shy of Tuesday's high of 5.041%, the highest since 2007.

The odds of further rate hikes by the Fed are high, with traders pricing in 34 basis points of tightening for the end of 2026. The money markets expect a 55% chance of a hike in October and a 90% chance of one in December.