{"id":2003286,"date":"2023-08-17T03:10:01","date_gmt":"2023-08-17T07:10:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes\/"},"modified":"2023-08-17T03:15:45","modified_gmt":"2023-08-17T07:15:45","slug":"us-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes\/","title":{"rendered":"US 10-Year Treasury Yield Soars to Pre-2007 Highs Post Fed Minutes"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">22<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2003286&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>The Benchmark 10-Year\u2064 U.S. Treasury Yield \u200bHits 16-Year High<\/h2>\n<p>The benchmark 10-year U.S. Treasury yield surged to \u200bits highest level in \u200d16 years after the \u2064Federal Reserve suggested \u2063more rate hikes might be needed to fight &#8220;significant upside risks \u2063to \u200cinflation&#8221; in the latest policy \u200cminutes.<\/p>\n<p>The 10-year yield picked up 3\u200c basis points to finish the Aug. 16 trading session \u2062at \u200d4.29 percent\u2014the highest close since October 2007. The real yield (inflation-adjusted) is 1.9 percent, the highest\u2064 since July 2009.<\/p>\n<p>The overall Treasury market was up across \u200bthe board. The 2-year \u2064yield added\u200d 1.1 basis points to \u20624.991\u2064 percent, while the\u2062 30-year\u200b yield jumped 2.1 basis points to 4.381 percent.<\/p>\n<blockquote>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/two-year-u-s-treasury-yields-hit-16-year-high-as-investors-are-spooked-by-latest-jobs-report-5381771\">Two-Year U.S. Treasury Yields Hit 16 Year High, as Investors\u200d Are Spooked by \u2062Latest Jobs\u2063 Report<\/a> (7\/8\/2023)<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/us\/two-year-treasury-yield-hits-16-year-high-on-hot-jobs-data-5378221\">2-Year Treasury \u2063Yield Hits 16-Year-High on Hot Jobs Data<\/a> (7\/6\/2023)<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/rising-treasury-yields-revive-fears-about-soaring-interest-payments-sustainability-of-public-debt-5107726\">Rising Treasury Yields Revive Fears About Soaring Interest Payments, Sustainability \u200cof Public Debt<\/a> \u2062 (3\/9\/2023)<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/federal-reserve-policymakers-consider-additional-interest-rate-hikes-5450900\">Federal Reserve Policymakers Consider \u2062Additional \u200cInterest-Rate Hikes<\/a> \u200c(8\/8\/2023)<\/li>\n<\/ul>\n<\/blockquote>\n<p>The Federal Reserve published the July Federal Open Market Committee (FOMC)\u2063 policy meeting minutes. \u2063Rate-setting Committee members refrained\u200d from declaring\u200c victory in their inflation fight, warning of &#8220;significant upside\u2063 risks to inflation&#8221; \u2062that\u200b might require additional monetary\u200c tightening to achieve the central \u2064bank&#8217;s 2 percent objective.<\/p>\n<p>But meeting participants were also cautious about\u200d the risks of \u200dgoing too far since monetary policy is already in restrictive territory.<\/p>\n<p>&#8220;A number of participants judged that, with the stance of monetary policy in restrictive \u200bterritory,\u2064 risks to the achievement\u200d of the Committee&#8217;s goals had become more two sided, \u2062and it was important that\u200d the \u200cCommittee&#8217;s decisions balance the risk of an inadvertent overtightening of \u200dpolicy against the cost of an insufficient tightening,&#8221; the meeting summary stated.<\/p>\n<p>Since March 2022, the Fed has raised interest rates 11 times \u200bfor a\u200b total\u200d of about 500 basis points to a target range of\u200b 5 percent and 5.25 percent. The institution held the benchmark fed funds rate \u200dsteady in \u2064June\u200c to assess the overall \u200deconomy and determine if \u200cthe tightening cycle \u2062has \u2064cooled economic\u200d conditions, tackled inflation, and doused the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/most-americans-saw-their-incomes-shrink-in-july\/\" title=\"Most Americans Saw Their Incomes Shrink in July\">red-hot labor market<\/a>.<\/p>\n<p>Heading into the September FOMC meeting,\u2062 there will be \u2063another jobs report and more inflation \u200bfigures.<\/p>\n<p>Meanwhile, investors will\u200b have an eye on the \u200dKansas \u2062City Fed Bank&#8217;s annual symposium in Jackson Hole, Wyoming, between Aug. 24 and Aug. 26.<\/p>\n<h2>Treasury Yields and Interest \u2063Rates<\/h2>\n<p>Is elevated Treasury yields the new normal? As the bond market continues to touch\u2063 fresh highs, this is the newest debate \u2064in the financial markets.<\/p>\n<p>Former Treasury Secretary Larry Summers \u200dbelieves higher long-term \u200crates &#8220;are with \u200dus to stay,&#8221; \u2062and could trend even\u2062 higher. The 10-year\u200b yield could \u200daverage \u200b4.75 percent in the\u2062 coming decade\u2063 after averaging about 2.9 percent over the last two decades.<\/p>\n<div>\n<figure style=\"width:600px\" class=\"alignnone\"><figcaption>Former \u2063Treasury\u2064 Secretary and Harvard Professor Larry Summers makes remarks during a discussion on <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/top-dem-economist-says-woke-math-is-a-national-security-threat\/\" title=\"Top Dem Economist Says Woke Math Is a National Security Threat\">low-income developing countries<\/a> at the \u2064annual IMF and World Bank Spring Meetings in Washington on April 13, \u200b2016. (Mike Theiler\/AFP via Getty Images)<\/figcaption><\/figure>\n<\/div>\n<p>&#8220;I don\u2019t \u200bparticularly see the current level of longer-term rates as \u200dany kind of peak,&#8221; Mr.\u2063 Summers <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-08-16\/summers-says-10-year-yields-could-average-4-75-in-coming-decade?utm_source=website&#038;utm_medium=share&#038;utm_campaign=twitter?sref=71oZvLv5#xj4y7vzkg\" target=\"_blank\" rel=\"noopener\">told<\/a> Bloomberg \u2062TV on Aug. 16,\u200b adding \u2062that the U.S. economy is in a different era, alluding \u200dto changes in\u2062 the\u200c labor market and\u200b international \u200ctrade.<\/p>\n<p>If \u2062Mr. Summers&#8217;\u200b projections are accurate, it would have a spillover effect on the\u2063 real economy, especially in the mortgage market.<\/p>\n<p>Mortgage rates generally track the 10-year Treasury bond.\u200d So, as the\u2062 rates on\u2062 this benchmark bond\u200b have been on \u2063an\u200d upward trajectory\u2064 since the \u200bmiddle of 2020, the 30-year fixed-rate average mortgage rate has followed.<\/p>\n<p>&#8220;Higher mortgage rates are probably here to stay for\u200b a while, but a reduction in uncertainty could meaningfully bring down mortgage rates,&#8221;\u2063 <a href=\"https:\/\/www.brookings.edu\/articles\/high-mortgage-rates-are-probably-here-for-a-while\/\" target=\"_blank\" rel=\"noopener\">wrote<\/a> the Brookings\u2062 Institution&#8217;s\u2064 Wendy Edelberg and\u200c Noadia Steinmetz-Silber.<\/p>\n<p>According to the \u200dMortgage Bankers Association \u200c(MBA), the <a href=\"https:\/\/tradingeconomics.com\/united-states\/mortgage-rate\" target=\"_blank\" rel=\"noopener\">30-year mortgage\u200b rate<\/a> \u200b rose to 7.16 percent \u200dfor the week ending\u2062 Aug. 11.<\/p>\n<p>Meanwhile, inflation persistence, \u200ca potential reacceleration of core and wage inflation, and &#8220;a perfect storm \u200bof different factors&#8221; could send longer-dated Treasury yields higher, says Patrick Saner,\u200c the head\u200c of macro \u200cstrategy at the Swiss Re Institute.<\/p>\n<p>Earlier \u200cthis month, the Treasury Department announced\u2063 a higher-than-expected debt supply \u200bof $1.007 trillion in the third quarter. Fitch\u200d Ratings downgraded the U.S. \u2063government&#8217;s \u2064credit quality. The Federal Reserve indicated tightening could \u200dcontinue into 2024\u200b as inflation\u2064 is not\u200c anticipated \u2064to\u2064 reach the 2 percent\u2063 target until 2025. The\u2063 Bank of \u200cJapan also diminished its yield curve control,\u200b potentially resulting in less \u2063demand from Japanese\u2062 investors.<\/p>\n<p>&#8220;These factors imply elevated levels of US debt supply,\u2063 and fuel questions about how easily the private sector will be able to absorb it all and whether \u200bthe US faces credit-worthiness\u200d issues,&#8221; wrote Mr. Saner in a <a href=\"https:\/\/www.swissre.com\/institute\/research\/sigma-research\/Economic-Insights\/inflation-rather-than-bond-market-crisis.html\" target=\"_blank\" rel=\"noopener\">research note<\/a>. &#8220;We are more &#8216;sanguine&#8217;: the most <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-10-year-treasury-yield-surges-to-highest-level-since-2007-after-fed-minutes\/\" title=\"US 10-Year Treasury Yield Soars to Pre-2007 Highs Post Fed Minutes\">important \u2064factor supporting longer-dated yields<\/a>, in our view, is continued economic\u200b resilience and the to-date slow \u200dprogress on\u2063 disinflation, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-official-inflation-and-high-interest-rates-likely-to-persist-through-2024\/\" title=\"Fed Official: Inflation and High Interest Rates Likely to Persist Through 2024\">suggesting interest rates<\/a> will remain elevated.&#8221;<\/p>\n<p>But growing optimism surrounding \u2063a potential soft landing \u200ccould \u2062mitigate fears\u2064 of another rate \u200bincrease this year and potentially\u2062 reverse the \u200dupward trajectory of \u2064Treasury yields, \u2064say RBC strategists.<\/p>\n<p>The 10-year Treasury, which\u2064 is typically sensitive to economic outlooks, found additional support this week on stronger-than-expected retail \u200bsales data. In July, retail sales\u200b climbed\u2062 0.7 percent, topping the consensus\u2063 estimate of 0.4 percent. \u200dThis resulted in the Atlanta Fed Bank\u2019s GDPNow model <a href=\"https:\/\/www.atlantafed.org\/cqer\/research\/gdpnow\" target=\"_blank\" rel=\"noopener\">estimate<\/a> for the third quarter soaring to 5.8 percent, up from 5 percent on \u2062Aug. \u206215.<\/p>\n<p>At the same time, the July minutes highlight that\u200d Fed officials are still prioritizing price \u2064stability over everything else, so strong economic data amid above-trend inflation could fuel \u2064officials to continue\u200d raising interest \u2062rates.<\/p>\n<p>&#8220;Whether \u200bit holds in the near-term may be dictated by sentiment around the Fed minutes today,&#8221; bank strategists wrote in a <a href=\"https:\/\/www.rbcwealthmanagement.com\/_assets\/documents\/insights\/daily-market-view.pdf\" target=\"_blank\" rel=\"noopener\">note<\/a>.<\/p>\n<p>Although economists are penciling in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/nasdaq-closes-lower-as-chipmaker-microns-warning-renews-tech-rout\/\" title=\"Nasdaq closes lower as chipmaker Micron\u2019s warning renews tech rout\">rate cuts early<\/a> next year due \u2062to a trifecta of challenges\u2014tighter\u2064 credit conditions, student loan repayments, and pandemic-era savings being exh<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 10-year U.S. Treasury yield hit a 16-year high as the Federal Reserve hinted at potential rate hikes to combat inflation risks. Closing at 4.29 percent, the yield rose by 3 basis points on August 16th.<\/p>\n","protected":false},"author":278,"featured_media":2003287,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2003286","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2003286","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2003286"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2003286\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2003287"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2003286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2003286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2003286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}