US 10-year Treasury yield rises to 5.3%, nearing 2002 high

  • US 10-year Treasury yields climbed despite softer-than-expected August inflation data.
  • 5.3% was the 10-year yield reached on Wednesday, nearing its highest level since 2002.
  • US Q2 GDP growth was revised to 2.2%, while September private-sector hiring beat expectations.

The US 10-year Treasury yield climbed to 5.3% on Wednesday, approaching its highest level since 2002, despite softer-than-expected inflation data. The PCE price index rose 0.3% in August, below the 0.4% forecast, while core PCE increased 0.2%, also missing expectations. Markets were supported by an upwardly revised second-quarter GDP growth rate of 2.2% and private-sector employment growth that exceeded forecasts in September. Persistent energy-driven inflation and a resilient economy have kept Treasury yields elevated and reinforced expectations for further rate increases, although expectations for a near-term hike eased after the data. Markets still largely anticipate another hike in December.

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