US yields rise with rate hike views, 30-year bond yield hits highest since 2004
Traders see a roughly 70% chance of another rate increase when the Federal Reserve next meets in October
US Treasury yields experienced a rise on Thursday (Sep 24), with the 30-year bond yield reaching its highest level since 2004. This surge in yields was driven by traders' perception of a 70% chance of another rate increase by the Federal Reserve when they meet in October. Fed policymakers, including Anna Paulson from the Philadelphia Fed and John Williams from the New York Fed, stated that additional interest rate hikes may be necessary to combat high inflation.
Following the Federal Reserve's rate hike last week, yields spiked on Wednesday after a stronger-than-expected US purchasing managers' report rekindled inflation fears, prompting traders to increase their bets on Fed rate hikes. The 30-year yield climbed 7 basis points to 5.472%, marking its highest level since June 2004. The 10-year Treasury note yield also rose 7.1 basis points to 5.185%, touching a 19-year high.
Despite a soft performance in the 7-year note auction, the 2-year US Treasury yield increased by 1.9 basis points to 4.914%, while the yield curve gap between 2- and 10-year Treasury notes stood at a positive 26.9 basis points.
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