Ten-year yield hits 19-year high

The ten-year Treasury note yield jumped more than thirteen basis points to five point one zero four percent on Wednesday, reaching its highest level since July two thousand seven.

Biggest move in 18 months

The spike marked the benchmark yield's biggest one-day move since April seven, two thousand twenty-five, when it surged sixteen point six basis points. The two-year yield jumped eleven basis points to four point eight eight nine percent.

Strong economic surveys spark move

S&P Global's services purchasing managers index jumped to fifty eight point seven in September, its highest in nearly five years. Manufacturing PMI raced to fifty six point seven, not seen in more than four years.

“US business continues to boom.”

Fed official signals more hikes needed

Fed Governor Michael Barr said further policy adjustments are likely needed to bring inflation to target. The Fed raised rates by twenty five basis points to three point seven five to four percent last week, its first hike since two thousand twenty three.

“Further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”

Market bets on October rate hike

Odds of a quarter point rate increase in October rose to sixty six point four percent from fifty five percent a day before, per CME Group's FedWatch tool. A month ago those chances stood at less than ten percent.

Treasury auction meets weak demand

The Treasury Department's auction of five year notes concluded with a yield of five point zero three three percent, far above a six auction average of four point one eight six percent. Indirect bidders bought fifty four percent, well below a sixty five percent average.

Oil prices fuel inflation concerns

Brent futures rallied three point eight six percent to settle at one hundred three point zero eight dollars per barrel. U.S. crude gained one point eight one percent to settle at ninety two point sixteen dollars per barrel as the U.S. Iran war continues.

Bond market signals re-tightening cycle

Tony Miano at Wells Fargo Investment Institute said the market is telling us we have entered a genuine re-tightening cycle. Unless the Fed gets inflation under control, the long end of the curve will continue to come under pressure.

“This is the market telling us we've entered a genuine re-tightening cycle.”