Bonds

10-year Treasury yield tops 1.9% before retreating

The 10-year U.S. Treasury yield hit 1.9% on Wednesday, its highest point since December 2019, and later retreated.

The yield on the benchmark 10-year Treasury note moved 1.6basis points lower to 1.852% at around 4 p.m. ET, after hitting 1.904% earlier. The yield on the 30-year Treasury bond fell 2 basis point to 2.167%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Treasurys


Bond yields have been surging this year amid growing investor anticipation that the Federal Reserve could soon start to hike interest rates.

The 2-year Treasury yield, which reflects short-term interest rate expectations, also topped 1% for the first time in two years on Tuesday. It rose slightly again on Wednesday, hovering above 1.047%.

In a note, BlackRock Investment Institute's team of strategists, headed up by Jean Boivin, argued that the anticipated timing of rate hikes wasn't causing the jump in yields.

"The sum total of expected rate hikes remains low, thanks to a historically muted Fed response to inflation," the strategists explained.

In fact, they said that the spike in the 10-year yield "tells us that investors are less willing to pay a safety premium for bonds and isn't bad news for stocks per se."

In addition, the German 10-year bund yield traded in positive territory for the first time in nearly three years on Wednesday morning.

The European Central Bank is currently behind on its normalization path, compared to the Fed and the Bank of England, but surging inflation and wider moves in the global bond market have now helped to push yields above zero.

CNBC's Matt Clinch contributed to this market report.