Global markets: Oil jump sends 30-year yields to two-decade high
TLT•Oil rose about 3%, while the U.S. 30-year Treasury yield reached 5.4816%, its highest since 2004. The 10-year yield rose to 5.196%, and futures priced a 71% chance of a Fed rate hike next month.
1. Yields rise as oil climbs
U.S. Treasury yields rose on Thursday as oil prices climbed about 3% after a Houthi missile attack on Saudi Arabia revived supply disruption fears. The 10-year yield gained 8.17 basis points to 5.196%, its highest since 2007, while the 30-year yield rose 7.96 basis points to 5.4816%, its highest since 2004.
2. Rate hike bets increase
Fed funds futures priced a 71% chance of a rate hike next month, up from about 53% before Wednesday’s U.S. business activity data. Two Fed policymakers said the central bank would likely need to raise rates again to curb high inflation.
3. Stocks little changed
The Dow fell 0.31%, while the S&P 500 and Nasdaq were roughly flat. The Treasury Department saw mediocre demand at its $44 billion auction of seven-year notes and bought back $4.078 billion in 20- to 30-year bonds.
