Yield on 10-Year Treasury Touches 2% For First Time Since Mid-2019

WASHINGTON–The yield on the 10-year U.S. Treasury note touched 2% on Thursday, doing so for the first time since mid-2019, following a new report showing sustained inflation (see separate CUToday.info report).

The report caused investors to further increase their expectations for tighter monetary policies, noted the Wall Street Journal in its analysis.

Yields, which rise when bond prices fall, had hovered in a tight range in the overnight session but jumped after the Labor Department released data showing that U.S. inflation accelerated 7.5% in January, the highest level in four decades.

The 10-year yield climbed as high as 2.001%, breaching the 2% threshold for the first time since August 2019. It was recently 1.994%, according to Tradeweb, compared with 1.928% Wednesday.

Yields on shorter-term Treasurys, which are especially sensitive to the outlook for near-term monetary policy, led to gains. The two-year yield recently stood at 1.479%, compared with 1.346% Wednesday, the Journal added.

Yields Climb Sharply

Treasury yields have climbed sharply this year based on expectations that the Federal Reserve will soon start raising interest rates to control inflation. Last week’s very strong jobs report also suggests inflation might not subside as quickly as many investors have hoped, the report observed.