10-year Treasury yield jumps to 3.51%, the highest level since 2011

Treasury yields climbed on Monday as traders anticipated the Federal Reserve’s next moves in the face of persistently high inflation.

The benchmark 10-year Treasury yield gained 6 basis points to 3.518%, hitting its highest level since April 2011. The yield on the 2-year Treasury bond rose 8 basis points to trade at 3.94%, trading around levels not seen since 2007.

Yields move opposite to prices. One basis point is equivalent to 0.01%

The Fed’s two-day meeting will begin Tuesday, with most market participants expecting another 75-basis-point hike by the central bank.

Some analysts have, however, argued the Fed could increase interest rates by a full point, or 100 basis points. It comes after inflation rose more than expected in August. The consumer price index increased 0.1% for the month and 8.3% over the past year — higher than economists expected.

The data has led investors to expect the Fed to double down on higher interest rates for longer, until prices fall. “The 10s-2s spread plunged last week and was trading at -46 bps on Friday and is just a few basis points from setting fresh multi-decade lows,” wrote Tom Essaye of the Sevens Report. “The signal from 10s-2s is clear:

The economy is going to slow materially and likely contract materially in the coming quarters, and it’s a message I believe we continue to need to heed.”

This report’s information was first seen on CNBC; to read more, click this link.