U.S. 10-yr Treasury yields rise further above 5%, hit highest level since 2007
U.S. 10-year Treasury yields rose to their highest level since early-2007 on Tuesday, extending their advance after comfortably breaking above the 5% level this week.
The 10-year rate jumped 1.3% to an intraday high of 5.030% and remained close to the level by 01:20 ET (05:20 GMT).
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The latest surge in yields comes amid increasing confidence that the Federal Reserve will hike interest rates by at least 25 basis points in this week. Bets on a hike were furthered by increasing signs of sticky inflation in recent weeks, as price pressures remained well above the Fed’s 2% annual target.
Concerns over deteriorating U.S. fiscal health– spurred by a growing deficit and rising debt levels– also pointed to traders demanding a higher yield premium to keep buying U.S. debt.
The 5% level was viewed as a major psychological threshold for the 10-year benchmark, and could threaten an already strained stock market rally as investors seek higher and safer yields in debt over high-flying equities.
U.S. stock futures turned sharply lower early-Tuesday following the spike in yields. S&P 500 Futures fell 0.3%.
