More market pain? US 30-yr yield highest since 2004
The yield on 30-year US Treasury bonds hit a 16-year high of 5.444% on Thursday, following strong economic growth and rising inflation concerns. The 10-year US Treasury yield also rose to a new post-financial-crisis high of 5.145%. This surge in bond yields reflects falling bond prices, as bond prices and yields move inversely to each other.
The S&P Global services PMI rose to 58.7 in September, its highest reading in nearly five years, while the manufacturing PMI climbed to 56.7, its strongest level in over four years. This has fueled expectations of a near-term interest rate hike by the Federal Reserve, with Fed funds futures traders now pricing in a 66% chance of an October rate hike.
The bond selloff was not limited to the US, with Japan's 10-year bond yield reaching a 19-year high and Indian government bonds soaring sharply. Analysts warn that high inflation, hawkish central banker messages, funding needs of the tech sector, and the geopolitical situation in the Middle East all contribute to the current rise in long-term interest rates.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
