U.S. Treasury yields moved higher on Wednesday after another sticky inflation report in the U.K. heightened concerns that global central banks would need to stay the course with their tightening campaigns.
The yield on the 10-year Treasury was up by nearly 3 basis points to 3.60%. The yield on the 2-year Treasury was last trading at 4.254% after rising by more than 5 basis points. Yields and prices have an inverted relationship. One basis point equals 0.01%.
Treasurys
A reading of U.K. inflation rose 10.1% on annual basis, above expectations for it to slow below a double-digit increase. U.K. CPI inflation increased 0.8% on a monthly basis, above the economists' consensus of 0.5% from Reuters.
Following the U.K. report, traders increased their bets the Federal Reserve will have to raise rates at least one more time when it meets next month There's an more than 83% chance the Fed will raise rates by a quarter-point at its next meeting, according to CME Group's FedWatch tool.
Fed officials have suggested recently that rates could continue to rise. That includes Atlanta Fed President Raphael Bostic, who told CNBC on Tuesday that he anticipated a 25 basis point interest rate hike after the central bank's next meeting.
Wells Fargo Investment Institute's Scott Wren does not anticipate rate cuts this year, a factor likely to trigger slowing growth and a recession at some point this year.
"As a result, we believe the S&P 500 will likely trade in a range with the upper end near current levels and downside support near 3,700 or just below," the senior global market strategist wrote in a Wednesday note. "Bond yields also are likely to trade toward their highs of the past few months in our view."
After topping 5% in March, the 2-year Treasury yield fell below 3.5% during the regional bank crisis. Since then, the yield has recovered a lot of that ground as traders bet the Fed keep hiking rates despite recession concerns.