US Bond Yields Surge as Investors Raise Bets on Two Fed Rate Hikes This Year

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Summary · why it matters

US government bond yields climbed today as investors sold off bonds following stronger-than-expected economic data and signals from Federal Reserve officials of a tighter monetary policy stance. As of 10:56 p.m. Thailand time, the yield on the 10-year Treasury stood at 4.200%, while the 30-year Treasury yield was at 5.512%. Fed Governor Michael Barr said he expects the Fed will need to keep raising interest rates to control inflation, noting that the labor market and economic growth remain strong, but inflation is still above the 2% target and there is no clear sign it will return to target within a suitable timeframe. Investors increased their bets that the Fed will raise rates two more times this year after the surge in oil prices and US Treasury yields. The latest CME Group FedWatch Tool indicates that investors now assign a 66.4% probability to the Fed raising rates by 0.25% to a range of 4.00-4.25% at its October meeting, up from 55.4% a week ago, and a 50.3% probability to another 0.25% increase to 4.25-4.50% at its December meeting, up from 41.7% a week ago.

Impact on assets 4

Carbon Removal (DAC)▲ · 1 stocks
CME Group Inc
CME
▲ PositiveDemandrelevance

Investors raised bets on two Fed rate hikes, boosting trading volumes and FedWatch Tool usage for CME Group.

Others▲ · 3 stocks
％Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Stronger economic data and Fed officials' hawkish signals pushed up expectations for two more rate hikes this year, raising the effective fed funds rate.

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