US Treasury yields rose today after the release of the Personal Consumption Expenditures (PCE) price index, which came in higher than expected, providing support for the Federal Reserve to raise interest rates. The 10-year Treasury yield stood at 4.660%, and the 30-year yield at 5.188%. Investors have increased their bets that the Fed will accelerate its rate hikes to October, from the previously expected December. The CME Group's FedWatch Tool indicates that investors assign a 54.7% probability that the Fed will raise rates by at least 0.25% at its October meeting, up from 46.4% last week. The US Commerce Department reported that the overall PCE index rose 3.7% in July year-over-year, higher than the expected 3.6%, while the core PCE index rose 3.3%, in line with expectations. Investors are watching for a speech by Fed Chair Kevin Warsh at the annual Jackson Hole meeting on Friday for signals on the direction of interest rates, amid inflation running above the 2% target and US government debt surging past $40 trillion.
PCE beat raises odds of Fed rate hike, pushing policy rate higher.
Hot PCE data boosts rate hike expectations, lifting 10-year yield.
Hot PCE data boosts rate hike expectations, lifting 30-year yield.
