23.09.202614:10:23UTC+00US 10-Year Treasury Yield Back Above 5%

The yield on the US 10-year Treasury note climbed back above 5% on Wednesday, touching levels last seen in 2007, after stronger-than-expected US PMI data reinforced expectations of additional Federal Reserve rate hikes. Preliminary S&P Global figures indicated that private-sector activity expanded in September at its fastest pace in more than five years, with both services and manufacturing showing improvement. The survey also reported the strongest employment growth since 2022, accompanied by renewed inflationary pressures.

At the same time, recent comments from several Fed officials were widely interpreted as more hawkish. Futures markets now imply nearly a 60% probability of another 25 bp rate increase next month, following last week’s hike, while the likelihood of an additional move in December is estimated at around 48%. Oil prices also remained volatile as traders monitored diplomatic efforts between the US and Iran aimed at ending the conflict.