FX.co ★ US 10-Year Yield Holds at 19-Year High

The yield on the 10-year US Treasury note climbed to around 5.2% on Monday, holding at its highest level since July 2007 as expectations grew that the Federal Reserve will further tighten monetary policy to rein in inflation. Data released Friday showed that new orders for core US manufactured capital goods rose more than expected in August, suggesting another quarter of robust business investment. At the same time, the University of Michigan’s consumer sentiment survey confirmed a sharp increase in inflation expectations in September. Markets are now assigning roughly a 66% probability to a Fed rate hike in October. Investors are awaiting the Fed’s preferred inflation gauge and key US labor market data this week for additional signals. Heightening concerns, Treasury Secretary Bessent’s attempts to curb long-term yields through expanded Treasury buybacks are widely seen as having had only limited impact.