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U.S. Bond Yields Surge Above 5% as Rate-Hike Expectations Rise
A weak five-year auction and stronger business activity lifted rate-hike bets, while the dollar rose and stocks fell across major indexes.
- On Wednesday, US Treasury yields for nearly all notes and bonds climbed above 5% for the first time since 2007, with the five-year yield crossing that threshold for the first time in nearly two decades.
- Robust economic data released Wednesday showed US business activity expanding at its fastest pace in over five years, prompting investors to price in an interest rate hike next month.
- US stocks sank Wednesday following the yield spike, with the S&P 500 falling 0.8% and the Nasdaq composite dropping 1.1%; the US Treasury's $44 billion 7-year note auction saw the lowest demand since 2018.
- Investors are diversifying away from expensive stocks to lock in returns on 'risk-free' assets, including 10-year TIPS offering a 2.78% real yield, the highest since 2008.
- Chinese President Xi Jinping arrived in Washington on Thursday for a summit with President Donald Trump, while Treasury Secretary Scott Bessent indicated the US is open to extending the trade truce expiring November 10.
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6 Articles
Trading Day: US yields cross 5% threshold
US bond yields soared on Wednesday, in many cases to the highest since 2007, and expectations of an interest rate hike next month surged, after figures showed that US business activity is expanding at its fastest pace in more than five years.
·London, United Kingdom
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Total News Sources6
Leaning Left1Leaning Right0Center5Last UpdatedBias Distribution83% Center
Bias Distribution
- 83% of the sources are Center
83% Center
L 17%
C 83%
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