Why Treasury Yields are Surging Today

Dow Jones
Sep 24

U.S. government bond yields are higher across the curve today, with the 10-year yield poised to make its biggest one-day jump in four months. Some of the factors behind the move:

-- Inflationary pressure. A monthly S&P survey of U.S. private-sector business activity showed strong growth, with jobs added at a pace not seen in four years. Yields jumped around 9:45 a.m. in New York when it was released.

-- Oil. Brent crude prices rose back above $100 a barrel in morning trading. The Iran war has raised prices, contributing significantly to a higher consumer price index in the U.S.

-- Fed comments. The U.S. central bank just delivered its first rate-hike since 2023, and now investors are trying to figure out how many more are on the way. Speaking in Chicago Wednesday morning, Fed governor Michael Barr said he expects the central bank will need to raise interest rates further to tamp down inflation.

-- A weak Treasury auction. Yields increased even further to highs of the day just after 1 p.m., when a fresh sale of 5-year notes from the Treasury department priced with the highest yield since 2006.

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