#US Bond Yields Rise Broadly as High Interest Rates Prove Hard to Cut
On September 23, US Treasury yields moved higher across the board, suggesting that the market is re-pricing expectations and that interest rates may remain at high levels. According to data from the US Department of the Treasury, yields on the 2-year, 10-year, and 30-year maturities rose to 4.85%, 5.11%, and 5.40%, respectively—up 14, 15, and 11 basis points from the previous trading day. The pressure comes from the Federal Reserve’s rate hike on September 16 to a range of 3.75% to 4.00%, along with August CPI rising 3.4% year over year and core CPI up 2.4% year over year, meaning inflation is still above the 2% target. If inflation cools only limitedly, corporate and mortgage financing costs could stay elevated, making valuation for growth stocks more sensitive. Next, watch October CPI, the yield spread between the 2-year and 10-year, the 30-year yield, and signals from the next FOMC meeting.
This article is for informational purposes only and does not constitute investment advice.
On September 23, US Treasury yields moved higher across the board, suggesting that the market is re-pricing expectations and that interest rates may remain at high levels. According to data from the US Department of the Treasury, yields on the 2-year, 10-year, and 30-year maturities rose to 4.85%, 5.11%, and 5.40%, respectively—up 14, 15, and 11 basis points from the previous trading day. The pressure comes from the Federal Reserve’s rate hike on September 16 to a range of 3.75% to 4.00%, along with August CPI rising 3.4% year over year and core CPI up 2.4% year over year, meaning inflation is still above the 2% target. If inflation cools only limitedly, corporate and mortgage financing costs could stay elevated, making valuation for growth stocks more sensitive. Next, watch October CPI, the yield spread between the 2-year and 10-year, the 30-year yield, and signals from the next FOMC meeting.
This article is for informational purposes only and does not constitute investment advice.
