The yield on the benchmark U.S. 10-year Treasury reached a new 15-year high on Friday, continuing its upward march on expectations of further Federal Reserve interest rate hikes.
- The yield on the 2-year Treasury
inched up to 4.62%.
- The yield on the 10-year Treasury
rose 4 basis points to 4.27%.
- The yield on the 30-year Treasury
increased 7 basis points to 4.30%.
What’s driving markets
This week has seen a surge in yields, reflecting upward moves in the expectations of how high the Federal Reserve’s benchmark interest rate will go with the peak rate known as the terminal rate.
“The Treasury market remained under significant pressure as investors continued to pencil in a higher terminal Fed funds rate, with investors pushing terminal pricing up to 5.02%,” said strategists at TD Securities.
There’s also continued uncertainty in the U.K. political situation, and in particular whether a new fiscal plan will be unveiled on Oct. 31, just three days after a new prime minister takes office.
See also: British pound, bonds slide on further political uncertainty as retail sales disappoint