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10-year Treasury yield rises to highest since 2007 as Fed rate-hike expectations rise
CNBC • • general
Key Points:
- The 10-year U.S. Treasury yield rose to 5.025%, its highest level since 2007, amid a sell-off in government debt ahead of the Federal Reserve's interest-rate decision.
- Yields on the 30-year Treasury bond and 2-year Treasury note also increased, reflecting market expectations of a potential quarter-point rate hike by the Fed.
- Traders see a more than 92% chance of a 25 basis point rate increase, driven by inflation remaining above the Fed's 2% target.
- Experts highlight a strong correlation between rising oil prices and higher Treasury yields, as elevated energy costs contribute to inflation expectations.
- The unusually high correlation (0.96) between crude oil prices and 10-year Treasury yields underscores the impact of geopolitical factors on inflation and interest rates.
