19 hrs ago
Treasury Yields Rise as Oil Surge Boosts Fed Hike Bets
U.S. government borrowing costs went up before the September 11 trading session.
This happened as oil prices continued to rise.
Higher oil prices can make traders worry that inflation will stay high.
Because of that, traders increased their expectations for the Federal Reserve to raise interest rates.
The chance of a rate hike next week rose to about 70%.
Markets were also fully expecting a rate hike by October.
The 30-year bond yield reached a level not seen since 2007.
The two-year note yield rose above 4.5%, its highest point since 2024.
U.S. Treasury yields rose five to 10 basis points across maturities.
The 30-year Treasury yield reached its highest level since 2007.
The two-year note yield moved above 4.5% for the first time since 2024.
Rising oil prices prompted traders to increase bets on a near-term Federal Reserve rate hike.
Markets put the chance of a hike next week at about 70% and fully priced in a move by October.
- Who
- Traders, the Federal Reserve, and U.S. Treasury market participants.
- What
- U.S. Treasury yields rose as traders increased bets on near-term Federal Reserve interest-rate hikes.
- Where
- The U.S. Treasury market.
- When
- Before the September 11 trading session; traders were assessing a possible hike the following week and another move by October.
- Why
- Oil prices continued to surge, prompting traders to raise expectations that the Federal Reserve would increase interest rates soon.
Key facts
- Yield movement
- U.S. Treasury yields rose five to 10 basis points across maturities.
- 30-year bond
- The yield reached levels last seen in 2007.
- Two-year note
- The yield exceeded 4.5%, a level not reached since 2024.
- Next-week hike odds
- Traders raised the implied probability of a Federal Reserve rate hike to about 70%.
- October pricing
- Markets fully priced in a rate hike by October rather than December.
- Primary trigger
- Oil prices extended their surge.
Sources
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