U.S. Treasury yields were broadly higher on Wednesday as inflation and debt concerns pressured global government borrowing costs.
The yield on the 10-year Treasury note β the main benchmark for mortgages, auto loans and credit card debt β was 1 basis point higher at 4.81%. It also reached 4.814%, its highest level since November 2023.
The 30-year Treasury yield was 2 basis points higher at 5.286%, while the yield on the 2-year Treasury note was near flat at 4.4%.
One basis point equals 0.01%, and yields and prices move inversely.
Yields were also higher globally as investors continued to demand a greater premium to take on medium- and long-term government debt.
Thee latest escalation in tensions in the Middle East has renewed fears about inflation proving entrenched, while traders increasingly expect interest rate hikes this month in the U.S. and beyond.
“Investors are now staring directly into the eyes of an inflation monster that threatens to become stronger unless action is taken. Central banks typically raise interest rates to fight inflation, and market expectations for the scale of rate hikes continues to evolve,” Dan Coatsworth, head of markets at AJ Bell, said in a Wednesday note.
“Bonds are reaching the point where certain investors may seek to lock in highΒ yields caused by the latest market volatility. What might be holding them back is an expectation thatΒ yields could get even higher if rates go up fast and hard, meaning certain bond investors could be playing a waiting game before piling in.”