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US Treasury Yields Rise as Inflation and Borrowing Concerns Persist
The US government borrows money by selling Treasury bonds.
Investors have recently been asking for more return to lend to the government, so Treasury yields have risen.
The 10-year yield reached 5.32%, and the 30-year yield hit its highest point in 24 years.
Higher oil prices have raised concerns that everyday costs and inflation could stay high.
Investors are also considering whether the Federal Reserve will keep interest rates high for longer.
A strong economy can make the Fed less likely to lower rates quickly, and can make some investors choose riskier investments instead of government bonds.
The government is borrowing heavily, so investors are watching how much demand there is for new bonds.
They are also waiting for the Fed’s meeting minutes for clues about future policy.
The 10-year Treasury yield reached 5.32% on Wednesday, up about 60 basis points since the end of July.
The 30-year yield touched 5.7041%, its highest level in 24 years, as bond selling resumed globally.
Rising oil prices and energy-supply concerns are adding to worries that inflation may remain elevated.
Resilient US economic growth may give the Federal Reserve less reason to cut interest rates quickly.
The US Treasury planned $39 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday.
- Who
- Investors in US and global bond markets, the US Treasury, and the Federal Reserve.
- What
- US Treasury yields rose, with the 10-year yield reaching 5.32% and the 30-year yield reaching 5.7041%.
- Where
- US Treasury markets, amid renewed selling across global bond markets.
- When
- Wednesday; the articles do not specify a calendar date.
- Why
- Investors weighed persistent inflation, higher oil prices, resilient economic growth, expectations for interest rates, and heavy government borrowing.
Key facts
- 10-year Treasury yield
- Reached 5.32% on Wednesday; rose about 60 basis points since the end of July.
- 30-year Treasury yield
- Touched 5.7041%, its highest level in 24 years.
- Oil prices
- Brent crude rose more than 1% to around $101.54 a barrel; US crude prices were up about 20% since the end of July.
- 10-year note sale
- The Treasury was scheduled to sell $39 billion of 10-year notes on Wednesday.
- Other scheduled debt sales
- The Treasury sold $58 billion of three-year notes on Tuesday and scheduled $22 billion of 30-year bonds for Thursday.
- Federal Reserve minutes
- Investors awaited minutes from the Fed’s September policy meeting.
- Oil-supply concerns
- Attacks on tankers in the Strait of Hormuz and fighting involving Saudi forces and the Houthis were cited as concerns about energy supplies.
Sources
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