Bonds

10-year Treasury yield nears highest level since 2007

U.S. Treasury yields rose on Tuesday, helping the 10-year yield trade near a level not seen in about 16 years as investors awaited updates from the Federal Reserve's two-day September meeting.

The yield on the 10-year Treasury rose just around 2 basis point at 4.339%, near its highest level since 2007. The 2-year Treasury yield added more than 1 basis point to 5.079%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

Treasurys


The Federal Reserve is expected to announce its next interest rate policy decision on Wednesday, when its September meeting draws to a close. Markets are widely expecting rates to be kept unchanged.

However, uncertainty remains about what the monetary policy path may look like beyond that. Comments from the Fed released alongside its interest rate decision and made in the subsequent press conference will therefore be key for investors who hope to gain insights about the outlook for rates.

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The 10-year

Further rates hikes are still a possibility, several Fed officials have indicated in recent weeks, pointing to economic data as a key factor. Recent data has suggested resilience in the economy and continuing but tolerable levels of inflation.

The Fed began its rate-hiking campaign in March 2022 in an effort to lower inflation and cool the economy and has since hiked rates at all but one of its meetings. It left rates unchanged when policymakers met in June, but it hiked rates again at its most recent meeting in July — to the highest level in more than 22 years.

Elsewhere, Canada's consumer price index rose 4% in August on an annualized basis, a hotter reading than economists expected. On a monthly basis, the index rose 0.4%.