10-Year Treasury Yield Reaches Highest Level Since 2007 Amid Expectations of Further Fed Rate Hikes
The 10-year U.S. Treasury yield reached a high of 5.12%, its highest level since 2007, as investors priced in the likelihood of another Federal Reserve rate hike later this year. The rise was driven by stronger-than-expected economic data and rising oil prices that raised concerns about inflation persistence. Federal Reserve Governor Michael Barr indicated additional interest rate hikes may be necessary to control inflation. Investors now see a 70% chance of a Fed rate increase in October, with Brent crude reaching around $100 per barrel amid supply worries highlighted by President Trump's proposal for a diesel export ban. The S&P Global Manufacturing PMI rose unexpectedly to 57 in September, signaling stronger economic activity. EY-Parthenon chief economist Gregory Daco suggested the Fed could raise rates again in December, potentially increasing stock market volatility.
Topics: Federal Reserve inflation interest rates oil prices Treasury yields