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Bond market signals lower odds for a September Fed hike
Implied probability for a Sept. 16 hike has dropped from nearly 100% in late July to roughly one-third, even as the 30-year Treasury yield climbed to about 5.31%.
Wall Street bond pricing has shifted away from a Federal Reserve rate hike at its Sept. 16 meeting, with implied odds falling from nearly 100% in late July to about one-third, according to a Yahoo Finance chart analysis.
Over the same period, the 30-year Treasury yield rose from roughly 5.09% to around 5.31%, its highest level since 2007, while longer-term rates did not ease in line with the reduced hike expectations.
The analysis frames this as a disconnect between what the central bank can control in the near term and what investors demand for lending over decades, leaving Fed Chairman Kevin Warsh in the middle of competing signals.
It also notes that the Fed has lowered its benchmark rate by 1.75 percentage points since beginning cuts on Sept. 18, 2024, yet the 10-year yield is about 1 percentage point higher and the 30-year is up about 1.3 percentage points, pointing to factors like deficits, inflation dynamics, and potential economic shocks behind the rise in long-term yields.