U.S. Treasury yields rise as Fed's Waller presses rate hike case
TLT•Short-dated Treasury yields rose after Federal Reserve Governor Christopher Waller said the Fed should raise rates next month and consider a half-point increase if inflation worsens. Markets fully priced in a quarter-point December hike, up from about 80% last week.
1. Waller backs rate hikes
Waller said the Fed should raise short-term borrowing costs next month even if government data shows inflation has cooled. If core consumer prices rise 0.3% or more from September, he said, a 50-basis-point hike should be considered.
2. Yields move higher
Two-year Treasury yields rose 6 basis points to 4.61% in London, while 10-year yields were about 2 basis points higher at 4.88%. October U.S. inflation data was due later Tuesday; economists polled by Reuters forecast core prices rose 0.2% month over month, compared with 0.3% in September.
