Bond yields continued to climb rapidly Wednesday morning, reaching their highest levels in over 19 years.
The yield on 10-year U.S. Treasuries rose to 5.079 percent, up 0.12 percent from a day earlier and the highest level since July 2007.
Yields move in the opposite direction of bond prices. When bonds sell off, the yields rise. Yields are up recently as investors are increasingly convinced that the Fed is likely to raise rates again later this year. As well, interest rates are expected to remain higher for longer as the economy continues to show signs of resilience despite recent increases in borrowing rates.
Federal Reserve Governor Michael Barr said Wednesday that further tightening of the stance of monetary policy is likely needed to bring inflation to the central bank’s two percent target. S&P Global reported that its composite purchasing managers index—which takes into account both manufacturing and services—rose to 58.4 in September, indicating that the economy is expanding at an accelerating rate. That was the highest since July 2021.
The yield on 2-year Treasuries climbed 0.099 percentage points to 4.876 percent.
Stocks sank on Wednesday and oil prices jumped.
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