U.S. Treasury Yields Hit November Highs Amid Inflation Fears
U.S. Treasury yields climbed to November highs as investors reacted to strong labor data and inflation, increasing expectations for Federal Reserve interest-rate hikes.
U.S. Treasury yields rose on Thursday as bond trading resumed following the Veterans Day holiday. The 10-year Treasury note yield climbed from 5.0100% to a November high of 5.10%, while the 2-year note yield rose from 4.7800% to 4.86%.
Investors drove the surge in response to hot inflation data and a strong October labor market. Market participants now anticipate a higher probability of interest-rate hikes to combat inflation, with the CME FedWatch Tool showing odds of two hikes through January rising to nearly 70% from 11% a week prior. This volatility follows a period of panic buying in October triggered by a tech stock selloff.
Additional pressure on tech stocks emerged following the resignation of Nvidia CEO Jensen Huang. Simultaneously, the United States Department of the Treasury auctioned $25 billion of 30-year bonds to help finance a budget deficit approaching $2 trillion. Oil prices remained largely flat, with West Texas Intermediate futures at $86.59 and Brent crude at $92.92, as Middle East negotiations remained deadlocked.
