A trader looks on as US Federal Reserve Chair Kevin Warsh is displayed on a television screen on the floor of the New York Stock Exchange (NYSE) in New York on September 16, 2026.
Timothy A. Clary | Afp | Getty Images
Treasury yields raced higher on Wednesday as new services and manufacturing sector data increased worry of further Federal Reserve rate hikes.
The benchmark 10-year Treasury note yield popped 12 basis points to 5.087%, a level not seen since July 2007. The 2-year Treasury note yield jumped more than 10 basis points to 4.885% and reached its highest level since June 2024. The 30-year Treasury yield gained more than 8 basis points to 5.389%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The S&P Global services PMI jumped to 58.7 in September, its highest level in nearly five years, from 56.5 in August. Its manufacturing counterpart also raced to 56.7, a level not seen in more than four years.
“US business continues to boom,” S&P Global Market Intelligence chief business economist Chris Williamson said in a statement. “To put the growth surge in context, barring the spike in demand following the opening up of the economy after the COVID-19 lockdowns, the latest improvement in business activity is the greatest recorded since early 2015. Business is clearly booming now in both manufacturing and services.”
However, “input costs have meanwhile jumped in September at the steepest rate for four years, with fuel and transport costs spiking higher thanks to the rise in oil prices,” he added.
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10-year reaches fresh 2007 high
Adding to the move higher in yields were comments made by Michael Barr. The Fed governor said further rate hikes are likely necessary as “risks to achieving our ​inflation target have ​increased.”
The Fed hiked its overnight benchmark rate last week, as rising energy prices have led to persistently elevated inflation readings.
Odds of another quarter-point rate increase in October rose Wednesday to 73% from 55% on Tuesday, per the CME Group’s FedWatch tool. Those chances stood at less than 10% a month ago.