Yield Spike: US 10-Year Treasury Hits 100bps Jump This Year
The 10-year US Treasury yield has seen a significant increase of 100 basis points this year, with half of that rise occurring since the Fed's July policy meeting.
According to BMO's Ian Lyngen and Vail Hartman, this is the steepest jump from the meeting before the first rate hike in seven hiking cycles going back three decades.
The 52-basis-point increase in benchmark US yields since the July FOMC gathering has raised concerns about the trajectory of crude prices and its impact on inflation expectations.
Kevin Warsh, a former Fed governor, described the 10-year Treasury as 'the most important asset anywhere in the world' and noted that virtually every price in the world is based on this risk-free rate.
Lyngen emphasized that the current episode of Fed tightening is reminiscent of the aggressive hike in the 1980s, which saw 10-year yields rise by over 200 basis points.