U.S. 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 around 13 basis points to 4.84%. The 2-year Treasury yield rose 12 basis points to 5.218% and hit a high not seen since 2006 in the session.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasurys
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.
"Retail sales came in higher than expectations this morning which sent yields ripping back up to problematic levels for the market," said by Alex McGrath, chief investment officer at NorthEnd Private Wealth. "This print continues to weigh on investors struggling to digest neutral fed speak to gain traction on future fed actions."
Investors also continued to weigh the outlook for the economy and 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.
Elsewhere, investors continued to monitor the Israel-Hamas war ahead of President Joe Biden's visit to Israel on Wednesday, and monitored corporate earnings reports, including from major banks.