Comments from three Fed policymakers lift odds of a September rate increase to 69% as 10-year yields rise 6.35 basis points.
Longer-dated Treasury yields surged to multi-year highs after three Federal Reserve officials argued for further rate hikes to curb inflation. The 10-year note yield climbed 6.35 basis points to 4.727%, its highest since January 2025, while the 30-year bond yield rose 5.14 basis points to 5.2584%, a level last seen in mid-2007.
Markets had priced in a roughly one-in-three chance of a hike at this week’s Fed meeting, where rates were held steady. Policymakers, including Dallas Fed President Lorie Logan, warned that without near-term action, inflation may not return to the 2% target amid a strengthening labor market and persistent price pressures.
Traders now assign a 69% probability of a rate increase in September, reflecting heightened hawkish expectations. Stocks pared earlier gains, with mixed performance across major indices as yields weighed on sentiment.