Treasury Yields Hit 24-Year Highs
U.S. Treasury yields remained close to multi-decade highs on Tuesday, keeping global markets focused on the tension between persistent inflation pressures and expectations that the Federal Reserve may pause its rate-hiking cycle this month.
The benchmark 10-year Treasury yield reached 5.3493%, its highest level in 24 years, while the 30-year yield also climbed to a 24-year high.
The rise in borrowing costs came despite softer U.S. employment data reducing expectations for another immediate Federal Reserve rate increase.
Inflation Concerns Keep Bond Yields Elevated
Investors remain concerned that inflation could stay elevated after U.S. services-sector data showed input costs rising at their fastest pace in four years.
Higher government debt and increased borrowing requirements have added further pressure to the Treasury market.
The bond selloff has therefore continued even as expectations for an October Fed hike have declined.
Fed Rate-Hike Expectations Fall
Markets were pricing only about a 23% probability of a Federal Reserve rate increase this month.
That leaves investors facing an unusual combination: reduced expectations for immediate Fed tightening but persistently high long-term Treasury yields.
