10-year Treasury yield climbs back to 5% on hot inflation data

Treasury yields jump on hot inflation

The ten-year Treasury yield climbed more than fourteen basis points to five point zero zero four percent after October consumer price index data came in hotter than expected.

Inflation readings exceed economist forecasts

The consumer price index for October grew zero point four percent, more than the zero point three percent expected.Core CPI, excluding food and energy, gained zero point three percent versus zero point two percent forecast.

Waller signals bigger rate hike possible

Fed Governor Christopher Waller said he would support a fifty basis point hike in December if inflation readings are higher than expected, warning that hiking only twenty-five basis points would put the Fed's credibility at…

“Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.”

Goldman Sachs expects hikes into 2027

Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said the hot CPI numbers signal that Fed hikes could spill into twenty twenty-seven despite wider AI concerns.

“A December hike is our firm base case despite wider AI jitters, and stubborn inflation means we cannot rule out further hikes in 2027.”

Markets price in December rate increase

Markets have already largely priced in a twenty-five basis point hike in December according to CME Group's FedWatch, with wholesale inflation numbers due Friday potentially shaping the Federal Reserve's future decisions.