US Yields Surge as Rate Hike Expectations Hit 70%
US Treasury yields rose sharply on Thursday as market expectations for another interest rate hike by the Federal Reserve reached nearly 70%. The yield on the 30-year bond touched its highest level since June 2004, reaching 5.5016%, while the benchmark US 10-year Treasury note rose to a fresh 19-year high of 5.2251%.
The comments from Fed policymakers, including Philadelphia Fed President Anna Paulson and New York Fed President John Williams, added to the upward pressure on yields. They suggested that additional rate hikes may be needed to curb high inflation, which is being driven by energy prices. Oil prices rose on Thursday as uncertainty about the Middle East war continued.
According to CME Group's FedWatch Tool, traders now see a roughly 70% chance of another increase when the US central bank next meets in October. This expectation was 66% by late Wednesday.