
AI-generated summary
U.S. Treasury yields have been volatile over the past six weeks due to fluctuating expectations about Federal Reserve interest rate policy, with a weak September jobs report temporarily easing rate hike fears.
Longer-dated U.S. Treasury yields hit their highest levels in more than two decades as investors absorbed new economic data and looked ahead to the release of the Federal Reserve's September meeting notes.
The benchmark 10-year Treasury yield jumped about 7 basis points to 5.347%, or its most elevated level since April 3, 2002. The yield on the 30-year Treasury bond was more than 7 basis points higher at 5.702% — a level not seen since late May 2002.
One basis point equals 0.01%, and yields and prices move in opposite directions.
Those moves came as traders took note of new data on service sector growth released Monday by the Institute for Supply Management. The ISM report showed that the Purchasing Manager's Index — a measure of economic activity in the service sector — grew to 54.9 in September, roughly in line with expectations and slightly below the August rate of growth.
The price index within the service ISM rose 1.4 points to 74, putting the 12-month average at its highest since March 2023.
Now, investors are looking ahead to the release of minutes from the central bank's September policy meeting, due out on Wednesday.
While investors have grappled with a bond market selloff over the past six weeks, a lackluster September jobs report on Friday helped to bring yields down, easing concern about another Federal Reserve rate hike at the bank's October meeting.
Traders are now pricing in a nearly 82% likelihood that the Fed will keep rates unchanged at its next meeting, according to the CME Group's FedWatch tool.
AI outlook — possibilities, not facts
The Federal Reserve will keep interest rates unchanged at its November meeting.
Likely · Within weeks

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