US 10-year Treasury yield rises to 5.293% — CNBC

In the United States, the yield on 10-year government bonds rose by nearly 4 basis points to 5.293%, recovering after a brief decline at the start of the session. Traders assessed lower-than-expected inflation data for August and awaited the September employment report, CNBC reports.

The yield on 30-year US Treasury bonds rose by nearly 5 basis points to 5.641%. It remained near its highest level since 2002, while the yield on 10-year securities traded near highs not seen since 2007. One basis point equals 0.01 percentage point, and bond prices and yields move in opposite directions.

August PCE data

The personal consumption expenditures price index, or PCE, which the Federal Reserve uses as its primary inflation indicator, rose by 0.3% month on month in August. The annual reading was 3.4%, compared with economists’ expectation of 3.7%.

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Core PCE, excluding food and energy prices, increased by 0.2% for the month and by 3% year on year. Economists surveyed by Dow Jones had expected increases of 0.3% and 3.3%, respectively. Federal Reserve officials generally consider the core reading a more accurate indicator of long-term inflation trends.

Rate and employment expectations

After the inflation data were released, market participants revised their expectations for monetary policy. According to the CME Group FedWatch tool, the probability of the Federal Reserve raising rates by a quarter of a percentage point in October fell from more than 80% at the beginning of the month to about 37%. Expectations for the next rate increase shifted to December.

Investors were also awaiting the September US employment report, which was due to be released on Friday. Economists forecast the creation of 84,000 jobs. CNBC notes that stronger-than-forecast data could contribute to a further rise in bond yields.