Yields Reach Multi-Year Highs
U.S. Treasury yields climbed on Thursday, with the benchmark 10-year note yield rising 4 basis points to 5.322%, after touching its highest level since 2002 on Wednesday before pulling back. The 30-year bond yield increased over 4 basis points to 5.705%, having traded just below a 24-year high in the prior session. The 2-year yield was up nearly 3 basis points at 4.793%. One basis point equals 0.01%, and yields move inversely to prices.[S1]
Fed Officials See More Hikes
According to minutes from the Fed's most recent gathering, published Wednesday, policymakers anticipate another rate increase before the year is out as a way to contain inflation. Market participants expect the central bank to leave rates unchanged at its Oct. 28 meeting and then tighten on Dec. 9. Fed Governor Christopher Waller said Thursday that further tightening is required to rein in inflation, which has run about 5-and-a-half years above the Fed's 2% goal, though he suggested an immediate move is not necessary.[S1][S2]
Waller, speaking at a Central Bank of Turkey forum in Istanbul, said the hikes do not need to come at consecutive meetings but should be in place within an acceptable period. His comments underscore the Fed's flexible approach to timing while maintaining a tightening bias.[S1][S2]
Auctions and Data in Focus
The week's third Treasury auction is drawing investor attention, with $22 billion in 30-year bonds scheduled for sale Thursday afternoon. A day earlier, the Treasury auctioned $39 billion of 10-year notes, and global central banks purchased more than 80%, exceeding the 72.4% average. Tuesday saw $58 billion of 3-year notes sold. BMO Capital Markets' Ian Lyngen wrote that the 10-year sale shaped sentiment in the Treasury market, and that Thursday's long-bond auction will serve as the next gauge of demand for U.S. debt amid worldwide deficit worries.[S1]
Investors are also set to watch Thursday's weekly initial jobless claims report and Friday's release of the Michigan Consumer Sentiment Preliminary reading for October.[S1]
