Treasury yields rose across the board on Wednesday as concerns over a recession spread among investors, and markets looked ahead to the release of housing market data.
The yield on the 10-year Treasury climbed to 4.123% shortly after noon ET, up by 12 basis points after hovering just below the key 4% level for much of Tuesday. The policy-sensitive 2-year Treasury yield rose by more than 10 basis points to 4.544%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Concerns about a recession have been growing louder among investors as the Federal Reserve continues to follow a hawkish path lined with interest rate hikes.
This has begun filtering into earnings projections, with some companies and analysts revising their outlook downward for the coming quarters.
A fourth consecutive 75 basis point rate hike is now widely expected from the central bank at their meeting in early November and Fed speakers have suggested that this trend could continue.
Speaking at an event on Tuesday, Minneapolis Fed President Neel Kashkari said he saw no reason not to push the central bank’s benchmark funds rate above 4.75% in order to tackle inflation. Such levels were last seen in the first half of 2006.
On the data front, housing starts and new building permits for September were both weaker than expected, reinforcing the idea that the housing market is in recession.
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