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Yields rise as stronger S&P PMI boosts rate hike odds
The move followed a sharp jump in 10-year yields from 5.0% to above 5.04% and Fed Funds futures shifting toward more tightening, with a second hike at the next meeting priced in more heavily.
Bonds slid as oil prices pushed higher alongside a bigger shock from economic data, according to Mortgage News Daily. The outlet said selling remained limited and yields mostly traded in a range until around 9:45 a.m. ET.
Mortgage News Daily pointed to unusually strong S&P PMI readings, noting that both services and manufacturing reached the highest levels in years. It said bonds reacted immediately, with 10-year yields jumping from 5.0% to above 5.04%.
The report said Fed Funds futures moved to reflect stronger odds for additional policy tightening, including a second rate hike at the next meeting and expectations for two hikes by December. Mortgage News Daily added that the probability of two hikes by December is now over 50%.