US Yields Surge on Inflation Fears and Weak Debt Auction

US Treasury yields surged on Wednesday after strong economic data and a weak debt auction sparked concerns about inflation. The 10-year yield rose by almost 17 basis points to 5.13%, its largest jump since April 2025, according to Bloomberg.

The S&P Global flash US composite PMI rose to 58.4 in September, the highest since July 2021, with input costs increasing at a nearly four-year high rate.

A USD70 billion five-year note auction cleared at 5.033%, its highest yield for that term since 2006, fueling bets on further Federal Reserve rate hikes.

Fed governor Michael Barr said more rate rises are likely to be needed, with futures priced a 73% chance of an October hike.