Treasury yields reached multiyear highs on September 10, driven by rising oil prices and inflation data. The Producer Price Index for August rose 0.4% month-over-month, with energy prices increasing 4.2%. West Texas Intermediate crude exceeded $100 per barrel, while Brent crude traded between $105 and $107.
Traders now estimate a 70% probability of a 25 basis point interest rate hike at the Federal Reserve meeting scheduled for September 15–16. This is an increase from the previous estimate of 60%. If implemented, this move would reverse the market consensus for 2026, which previously favored rate cuts.
The 10-year Treasury yield rose above 4.9%, reaching its highest point since late 2023. The 30-year yield climbed to approximately 5.35%, a level not seen since 2007. Meanwhile, the 2-year yield surpassed 4.5%, marking its highest point since early 2024.
Treasury Secretary Scott Bessent attempted to stabilize the market through bond buyback programs. However, these interventions failed to curb the rise in yields as market forces remained dominant. Investors are now awaiting the upcoming FOMC meeting to confirm the Fed's policy direction.
