US Treasury Yields Soar to 2007 Levels Amid Strong Economic Data
US Treasury yields surged on Wednesday, reaching levels last seen in July 2007. The 10-year yield climbed above 5% to 5.135%, marking its biggest one-day move since April 7, 2022.
The increase was driven by stronger-than-expected economic data, higher oil prices, and weak demand at a five-year Treasury auction. S&P Global reported that business activity in September rose to 58.7, its highest level in nearly five years, with services purchasing managers' index reaching 56.5 and manufacturing PMI climbing to 56.7.
This data added to expectations of further monetary policy tightening by the Federal Reserve. Traders increased their bets on another quarter-point rate increase in October, with the probability rising to 70% from 55% a day earlier, according to the CME Group's FedWatch tool.