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Dow slides as 30-year Treasury yield hits highest since 2004
The 30-year yield rose to its peak since 2004 even as 2-year yields barely moved, reinforcing that the market is pricing higher rates further out.
FXStreet reports the Dow Jones Industrial Average fell toward fresh lows as the 30-year Treasury yield climbed to its highest level since 2004, while the 2-year yield moved only slightly.
The index dropped as far as 51,100, its lowest since June, and was set up for a third straight losing session, with the long end of the curve reflecting demand for higher compensation to lend to the US government for three decades.
FXStreet said markets are repricing the portion of the rate path the Fed does not directly set, with New York Fed President Williams indicating explicit forward guidance is over, and Philadelphia Fed President Paulson arguing that a bit more tightening may be needed after the September 16 hike to 3.75% to 4.00%.
The report also tied the long-end pressure to investors seeking higher returns on 30-year exposure, noting record federal interest costs as a share of GDP, a 30-year mortgage rate near 7%, and continued government borrowing concerns.
Latest closeDow Jones 51,245.74 ▼0.5%