10-year Treasury yield climbs as investors digest U.S. rating downgrade

Treasury yields rose on Thursday as investors digested Fitch Ratings’ decision to cut the U.S.′ long term foreign currency issuer default rating and looked ahead to key economic data.

At 4:34 a.m. ET, the 10-year Treasury was up by more than seven basis points to 4.1527%, trading around levels last seen in November 2022. The yield on the 2-year Treasury was up by over one basis point to 4.9061%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

Investors considered what could be next for the U.S. economy as they weighed recent developments and awaited key economic data.

Earlier this week, Fitch Ratings announced that it had downgraded the long-term foreign currency issuer default rating for the U.S. from AAA to AA+, citing “fiscal deterioration” and concerns about governance standards and growing general debt.

Meanwhile, the Treasury Department said on Tuesday that it would sell securities in the form of 3-year, 10-year and 30-year debt worth a total of $103 billion.

Looking ahead, investors are awaiting a series of key economic data that could provide fresh hints about the state of the labor market and inform the Federal Reserve’s next interest rate policy moves.

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