10Y Treasury Yield Holds Near 2007 Highs

2026-09-30 12:58 By Joana Ferreira 1 min. read

The US 10-year Treasury yield hovered around 5.25% on Wednesday, remaining near its highest level since 2007 as investors assessed a batch of economic data.

The PCE price index rose 0.3% in August, below expectations of 0.4%, while core PCE increased 0.2%, also missing forecasts.

On an annual basis, headline PCE inflation stood at 3.4%, below expectations of 3.7%.

Meanwhile, final Q2 GDP data showed the US economy expanded 2.2%, up from an earlier estimate of 1.5%, while the ADP report showed private-sector job growth exceeded expectations in September.

Treasury yields remain elevated amid persistent energy-driven inflation, a resilient economy and hawkish Fed signals that have supported expectations for further rate hikes.

However, New York Fed President John Williams said the Federal Reserve does not need to rush into another rate increase following the hike earlier this month.

Markets are now pricing in a below 40% chance of a 25 bps rate hike in October.



News Stream
10Y Treasury Yield Holds Near 2007 Highs
The US 10-year Treasury yield hovered around 5.25% on Wednesday, remaining near its highest level since 2007 as investors assessed a batch of economic data. The PCE price index rose 0.3% in August, below expectations of 0.4%, while core PCE increased 0.2%, also missing forecasts. On an annual basis, headline PCE inflation stood at 3.4%, below expectations of 3.7%. Meanwhile, final Q2 GDP data showed the US economy expanded 2.2%, up from an earlier estimate of 1.5%, while the ADP report showed private-sector job growth exceeded expectations in September. Treasury yields remain elevated amid persistent energy-driven inflation, a resilient economy and hawkish Fed signals that have supported expectations for further rate hikes. However, New York Fed President John Williams said the Federal Reserve does not need to rush into another rate increase following the hike earlier this month. Markets are now pricing in a below 40% chance of a 25 bps rate hike in October.
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Treasury Yields Hold at Multi-Decade Highs
The yield on the US 10-year Treasury note held around 5.23% on Wednesday, remaining near its highest level since 2007, while the 30-year yield climbed as high as 5.62%, reaching levels not seen since 2002. Bond yields remained elevated amid persistent energy-driven inflation, a resilient US economy and hawkish signals from Federal Reserve officials that strengthened expectations for further rate hikes. Fed Governor Michael Barr reiterated that additional rate increases will likely be necessary to bring inflation under control, while New York Fed President John Williams said another rate hike “late this year” could be appropriate. Markets are currently pricing in nearly one percentage point of Fed rate increases over the next 12 months. Investors now await Wednesday’s PCE price index report, the Fed’s preferred inflation gauge, followed by Friday’s closely watched monthly jobs report, which could reinforce expectations for further policy tightening.
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Government Bond Sell-Off Continues
The yield on the US 10-year Treasury note resumed its climb to 5.28% on Tuesday, holding at 2007 highs, while the 30-year rate surpassed 5.6% to touch a 2002 dot-com bust level. Global government bonds have come under pressure as Middle East-driven oil price gains fuel expectations that central banks, including the Federal Reserve, will raise interest rates further. Swaps traders are pricing in nearly a full percentage point of Fed rate hikes over the coming year. In the US, strong economic activity, along with concerns over large fiscal deficits and rising government debt, is also weighing on the bond market. Still, the latest data offered some signs of weakness, with both job openings and CB consumer confidence surprising on the downside. Attention now turns to Wednesday’s PCE report and Friday’s jobs data for further clues on the economy and the Fed’s policy path.
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