10-year Treasury holds at highest levels since 2008 as recession fears grow

Treasury yields rose were relatively calm on Thursday after surging to highs not seen in more than a decade in the previous session.

The yield on the policy-sensitive 2-year Treasury was last at 4.569% after rising by less than two basis points.

The benchmark 10-year Treasury yield was little changed near 4.125%. It climbed as high as 4.18% overnight, reaching level last seen over 14 years ago in mid-2008.

Yields and prices move in opposite directions and one basis point equals 0.01%.

U.S. housing starts and building permits data for September came in below expectations on Wednesday, which investors widely understood as a sign of recession in the housing sector.

Many of them have been concerned about the economy contracting as the Federal Reserve has been hiking interest rates to fight persistent inflation.

Chicago Fed President Charles Evans told reporters on Wednesday that inflation was “much too high” and that the central bank needed to continue with its current policy approach. He added that hiking rates much further would, however, “weigh on the economy.”

Another 75 basis point hike is expected from the central bank at its next meeting on Nov. 1 and 2.

On Wednesday, traders will gain further insights into the U.S. housing market as existing home sales data for September is released, and they will pay close attention to further Fed speakers as well as earnings reports.

Persistently high inflation and related recession concerns are weighing on bond markets around the world, pushing up yields.

The yield on the German 10-year bund was last up by around 8 basis points to 2.448%, levels last seen in 2013. Meanwhile, the British 10-year gilt yield was up 9 basis points to 3.964% amidst economic turmoil in the U.K.