U.S. Treasury Yields Rise as Inflation Keeps Fed in Focus

The U.S. 10-year Treasury yield reached 5.12% as investors weighed persistent inflation and the outlook for Federal Reserve policy, Ekonomim reported. The yield remained below levels tested in early October, which the outlet said were the highest since 2002.

Selling pressure extended across the yield curve. The two-year yield rose to 4.77%, while the five-year reached 4.93% and the 10-year reached 5.12%. Longer-term yields stood at 5.50% for 20-year bonds and 5.45% for 30-year bonds, according to Ekonomim.

Markets were focused on the Fed’s next steps after Chair Kevin Warsh said recent inflation data had not changed the current path, without signaling another rate increase. Futures markets priced an 85% chance that policymakers would hold rates steady at their October 27-28 meeting. The chance of a 25-basis-point increase in December was priced at 77%.

U.S. consumer inflation rose to 3.7% in September from 3.4%, Ekonomim reported, while producer prices also increased. The Fed raised its policy rate from 3.75% to 4% at its September meeting. The outlet said bond-market direction will depend on Fed decisions, inflation and global risk appetite.