BlockBeats news: On September 14, ahead of this week’s Federal Reserve meeting, the U.S. benchmark 10-year Treasury yield rose to the key psychological level of 5% on Monday—the first time in nearly three years—as markets widely anticipate the Fed will raise rates to curb inflation.
Last Friday’s data showed that U.S. consumer prices accelerated in August, intensifying market expectations that the Federal Reserve will raise interest rates to curb inflation. Tom di Galoma, Managing Director at Meeschaert Financial, said this “could be the straw that breaks the camel’s back.” Over the past month, yields have continued to rise amid rising rate hike expectations, increased supply of corporate and government debt, optimistic growth prospects, and concerns about the U.S. long-term fiscal trajectory.
Galoma stated: "Our budget, deficit, and overall debt structure continue to expand." Subsequently, whether the 10-year Treasury yield can hold above the 5% level will serve as a key test of whether the economy and stock market can sustain higher interest rates.