U.S. Treasury yields rose on Wednesday, with the yield on the 10-year rate hovering below 5% but near multiyear highs, as investors considered the state of the economy.
The yield on the 10-year Treasury was up by 11 basis points at 4.954%. The yield on the 2-year Treasury was hovering near the flatline at 5.1%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasurys
The yield on the 10-year Treasury crossed the 5% mark on Monday, reaching levels last seen in 2007, before pulling back again slightly, while remaining near levels last seen over a decade ago.
That came as Pershing Square's Bill Ackman said Monday that he covered his bet against long-term Treasurys as he believes investors may soon seek safety in bonds as geopolitical concerns mount.
Investors have been closely following the Israel-Hamas war and assessing its impact on the global economy, especially the energy sector. However, there has not been a significant run on Treasurys since the war began — a common phenomenon during times of geopolitical crisis.
The yield on the 10-year Treasury has been steadily climbing in recent weeks and has hit several multiyear highs this month. Investors have been considering the outlook for interest rates ahead of the Federal Reserve's next policy meeting on Oct. 31 and Nov. 1.
Several Fed officials have suggested that higher Treasury yields will create tighter financial conditions, which could slow the economy. That could mean the Fed does not need to hike rates, and it prompted many investors to believe rates will be left unchanged next week.
On Wednesday, investors will be watching out for new home sales and building permits data for September, and Fed Chairman Jerome Powell is expected to give remarks.