U.S. 10-Year Treasury Yield Rises to 5.15% as Markets Brace for Rate Hikes

Key Facts

The U.S. 10-year Treasury yield rose to 5.15% on Friday, November 13, from 5.10% in the previous session, as investors awaited the Federal Reserve’s tightening of monetary policy at its next two meetings. The Associated Press said economists widely expect a rate hike at the December meeting, with another increase likely in January. The bets followed data showing persistent inflation pressures, while the central bank left interest rates unchanged at its most recent meeting after an earlier hike. The expected path has put bond yields and borrowing costs under market scrutiny as signals from inflation and employment diverge. On Wall Street, the S&P 500 fell 0.4% and the Nasdaq 0.9% on Friday, while the Dow Jones rose 0.1%.

The Bureau of Labor Statistics report showed the producer price index for final demand rose 0.3% in October, following increases of 1.4% in September and 0.4% in August. For the 12 months ended in October, the index was up 6.5%, its largest annual increase since a 7.4% rise in November 2022. The comparison between the monthly and annual readings shows that monthly growth slowed from September, while accumulated year-over-year pressures remained elevated. The consumer price index rose 0.4% in October, while the index excluding food and energy increased 0.3%, according to the Bureau of Labor Statistics. These readings keep price developments at the center of debate over the rate path, in line with expectations reported by the Associated Press.

In the details of producer prices, prices for goods for final demand rose 0.5% in October, compared with a 2.5% increase in September, while services prices rose 0.2%. The Bureau of Labor Statistics attributed three-quarters of the increase in services prices to a 2.0% monthly rise in prices for transportation and warehousing services for final demand. These components show that October’s increase was not uniform across goods and services: goods price growth slowed from the previous month, while services prices rose. In the labor market, initial jobless claims increased by 9,000 to 200,000 in the week ended November 7. The figure was above the 195,000 claims expected by economists surveyed by Reuters, but remained at the 200,000 level. In the week ended October 31, continuing claims fell by 20,000 to 1.697 million, according to the report carried by Reuters via Investing.com.

Federal Reserve Governor Christopher Waller said a half-percentage-point hike the following month was a possibility, and described inflation as far above the bank’s 2% target. Waller added: "Economic activity is strong, the labor market is stable, but inflation is higher than it should be, and far above the Federal Reserve’s 2% target." The remarks came amid expectations of rate hikes in December and then January, while the Federal Reserve had left rates unchanged at its most recent meeting after an earlier hike. Investors are awaiting Federal Reserve Chair Kevin Warsh’s remarks on November 16 at 12 p.m., during the Task Force on Productivity and Jobs conference in San Francisco. The November jobs report is due on December 4, ahead of the Federal Open Market Committee meeting scheduled for December 8 and 9, 2026.