U.S. Treasury yields remain near multiyear highs as investors wait for economic data and the Federal Reserve’s September meeting minutes.
The supplied source says the benchmark 10-year Treasury yield was around 5.273%, while the 30-year yield was near 5.626%.
Bond markets have been volatile after a recent selloff pushed yields higher.
A weaker-than-expected monthly jobs report helped ease immediate fears of another rate increase. Traders are now pricing an approximately 82% probability that the Fed will keep rates unchanged at its next meeting, according to the CME FedWatch Tool cited in the source.
Attention now turns to the Institute for Supply Management’s services report and the Fed minutes due Wednesday.
The minutes are especially important because investors want to understand how policymakers are thinking about the current tightening cycle and the neutral rate.
For equities, high Treasury yields remain a valuation headwind. For banks and insurers, they can change asset yields and funding economics. For heavily indebted companies, they can raise refinancing costs.
What investors should watch: the 10-year yield, Fed minutes, services inflation, labor-market data, changes in rate-hike probabilities and whether long-term yields can fall without a major deterioration in growth.
BTI’s bottom line: markets have become more confident that the Fed may pause, but long-term yields remain restrictive. Until the bond market stabilizes, rates are likely to remain one of the most important variables for equity valuations.