The 10-year Treasury yield jumped after September U.S. inflation and core inflation came in above forecasts. The reading arrives two weeks before the Fed's next rate decision, and one economist argues the central bank may have to raise rates further.
The 10-year Treasury note yield jumped 9 basis points to 5.304% after the latest U.S. inflation print. CNBC describes the 10-year yield as the main benchmark for mortgages, auto loans and credit card debt. A basis point equals 0.01%.
September inflation tops forecasts
The Consumer Price Index rose 3.7% year over year in September, above the Dow Jones consensus estimate of 3.6%. Core inflation, which excludes food and energy prices, came in at 2.6% on an annualized basis, against a 2.5% consensus estimate.
Investing.com reports that headline CPI accelerated from 3.4% in August. It adds that core CPI rose 0.3% month-on-month, beating expectations of 0.2%.
Rate-hike pressure returns
The longer-dated 30-year Treasury yield was up 5 basis points to 5.61%. The inflation reading comes just two weeks before the Fed's next interest rate decision.
With inflation remaining sticky, the central bank may need to raise rates higher and keep them there for longer in 2027, said Christopher Rupkey, chief economist at Fwdbonds. He added: "Inflation is alive".
Investing.com reports that trading desks noted money markets had previously been leaning toward a pause, and that the broader pickup in inflation restores pressure on policymakers to consider further tightening before year-end.
Investors now await the September producer price index, retail sales and initial jobless claims, all due on Thursday.
Sources: CNBC, Investing.com
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