10-year Treasury Yield Surges on Investors' Market Sentiment

10-year Treasury Yield Surges on Investors' Market Sentiment

US Treasury yields rose on Tuesday as investors mulled over the outlook for interest rates and the economy following stronger-than-expected economic data.

The yield on the 10-year Treasury jumped more than 9 basis points to 4.805%, while the 2-year Treasury yield rose nearly 6 basis points to 5.152%.

The move in yields came as retail sales figures for September came in well above Wall Street’s expectations. The data showed a 0.7% increase for the month, topping the 0.3% estimate according to economists polled by Dow Jones.

Investors also continued to weigh the outlook for the economy and the Fed rate-hiking campaign. Several policymakers have hinted in recent weeks that they do not believe rates need to go any higher, despite the central bank saying it expects one further rate hike this year.

Philadelphia Fed President Patrick Harker said last week that economic data suggested to him that no further rate hikes are necessary and keeping them at their current level would allow their impact to fully unfold.

Various other Fed officials are due to speak this week, including central bank Chairman Jerome Powell. The Fed’s next interest rate decision is expected on Nov. 1, and markets are pricing in an around 90% chance that rates will be left unchanged then, according to the CME FedWatch tool.

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