Jan 9, 2025

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US 10-Year Treasury Yields Rise to Highest Level Since 2007

Treasury yields increased, with the US government's 10-year Treasury note auction yielding 4.68%, the highest since 2007. Benchmark yields reached 4.73%, a level not seen since last spring.

Key points include:

• Yields on 10-year notes rose from 3.7% to 4.7% since the Fed began its rate-cutting cycle in September.
• The Fed is lowering rates due to perceived inflation decline, although FOMC members' inflation expectations for 2024 increased from 2.6% to 2.8%.
• Futures markets show a 95% chance of steady rates at the upcoming Fed meeting.
• Concerns over potential tariff policies under Trump's incoming administration contributed to bond market selloff.
• Upcoming Fed minutes may provide further insights into current market dynamics.