The benchmark 10-year treasury briefly rose above 4% on Wednesday, hitting levels not seen since 2008, as markets priced in comments from Federal Reserve speakers who hinted at further interest rate hikes. ‘interest.
The 10-year Treasury yield rose 3 basis points to 3.9945% around 4:20 a.m. ET. Earlier today, it hit 4.019%.
The yield on the policy-sensitive 2-year Treasury fell. It was down 4 basis points at 4.2582%.
Yields and prices move in opposite directions. One basis point is equal to 0.01%.
Traders were rocked by a series of comments from Fed speakers earlier in the week. Their largely hawkish tone suggested to many analysts and investors that further interest rate hikes would be implemented.
That sentiment was echoed overnight by San Francisco Fed President Mary Daly, who said the central bank was “committed” to reducing inflation.
Chicago Federal Reserve Chairman Charles Evans took a slightly different tone on Tuesday, telling CNBC’s “Squawk Box Europe” that he was concerned about the possibility of rising rates too quickly. Evans also said he was still “cautiously optimistic” about his ability to avoid a recession.
Traders are expecting further economic comments from Federal Reserve officials that could provide further indication of the central bank’s policy approach. This includes a speech from Federal Reserve Governor Michelle Bowman and Federal Reserve Chairman Jerome Powell.
Home sales data for August is also expected to be released.