Treasury yields rose ahead of the Federal Reserve’s next interest rate decision this week, with the 10-year yield hitting its highest level in more than a decade.
Benchmark 10-year Treasury yields were at 4.34% on Tuesday, the highest since 2007. Meanwhile, the benchmark two-year Treasury yield was at 5.08%, the highest since 2006 , although it was a bit short. highest in March.
Returns are also inverted, meaning short-term returns are higher than long-term returns. Yield curve inversions can portend recession and can show that investors have little confidence in the recovery of growth in the coming years.
The higher yields come a day before the Fed makes its next decision on interest rates. The consensus is that the central bank will keep its rate target steady on Wednesday at between 5.25% and 5.50%, although recent inflation reports have made it likely that it will have to maintain an accommodative stance for longer , which is likely partly driving the higher yields, according to Greg McBride, chief financial analyst at Bankrate.