US yields rise as investors weigh outlook for rate hikes
TLT•Benchmark Treasury yields and curve spread
The yield on the benchmark US 10-year Treasury note was last up 4.9 basis points at 4.996%. It reached 5.041% on Tuesday, the highest since 2007.
The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, was up 4.7 basis points at 4.737%.
The yield on the 30-year bond rose 3 basis points to 5.326%.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 25.5 basis points.
Bank of Japan hike adds to rate-tightening concerns
On Friday, the Bank of Japan raised interest rates to a 31-year high and its governor signaled the central bank has entered a new phase focused on preventing inflation from overshooting its target.
"The two-year is going to be moving in tandem with hike pricing," said Molly Brooks, US rates strategist at TD Securities.
"There's more risk (of) pricing in more hikes than pricing out hikes at this point."
Traders see a more than 57% chance of another increase when the US central bank next meets in October, according to CME FedWatch. That expectation was at 53% late Thursday.
Yields hold gains after weak factory production data
Investors will weigh upcoming data for clues about the US economic outlook.
Yields mostly held gains after data on Friday, including a report showing US factory production unexpectedly fell in August after seven straight monthly increases.
