The 10-year Treasury yield rose to a new multidecade high after data showed the U.S. economy grew faster than expected in the second quarter. The bid yield on the 10-year note climbed to 5.304%, pushing past its 2007 intraday peak to its highest level since May 2002, according to Tradeweb. The U.S. Commerce Department revised its estimate for U.S. GDP growth for the second quarter to 2.2%, up from a prior estimate of 1.5%.
Meanwhile, the Federal Reserve’s preferred measure of inflation rose at an annual rate of 3.4% in August, matching July’s revised rate. Investors this week have pared bets on an October interest-rate increase by the Fed, now pricing in only about a 39% chance of a hike. The retreat in rate-hike expectations kicked off after a Fed official suggested the central bank isn’t in a rush to raise rates.
In stocks, the Nasdaq composite added 0.2%, while the Dow industrials fell 0.9%. Oil prices are on the rise, after easing in recent days as exports from the Middle East pick back up. New reports out Wednesday showed the U.S. economy grew more than previously thought in the second quarter and that inflation remained firm in August.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing