The yield on the U.S. 10-year Treasury note rose to 5.28%. Although inflation indicators monitored by the Federal Reserve fell short of market expectations, leading to increased hopes for a pause in interest rate hikes, rising oil prices and stronger-than-expected employment data pushed long-term rates higher.
According to the International Financial Center, on September 30, the yield on the U.S. 10-year Treasury note increased by 0.05 percentage points to 5.28% compared to the previous trading day.
The core Personal Consumption Expenditures (PCE) price index for August, released on the same day, rose 3.0% year-over-year, falling below the market expectation of 3.3%. The month-over-month increase was also 0.2%, lower than the anticipated 0.3%. The core PCE, which excludes energy and food prices, is a key inflation measure for the Federal Reserve when making monetary policy decisions.
The lower-than-expected inflation figures led the market to reduce the likelihood of a rate hike by the Fed in October. The Chicago Mercantile Exchange's FedWatch tool indicated a 62.9% probability of maintaining the current interest rate in October.
However, long-term Treasury yields increased. The International Financial Center noted that the changes in the PCE calculation method and the recent rise in diesel prices were not reflected in the data. The year-over-year increase in core PCE remained at the same level as the previous month, while the month-over-month increase rose from 0.1% to 0.2%. Although the figures fell short of expectations, the overall inflation trend did not show signs of significant slowdown.
International oil prices also rose, heightening inflation concerns. On the same day, Brent crude oil was priced at $103.53 per barrel, up 0.92% from the previous trading day. With oil prices consistently above $100 per barrel, the burden of rising energy costs continued to impact inflation.
Stronger-than-expected employment data also influenced the rise in Treasury yields. The U.S. employment firm ADP reported that private sector employment increased by 90,000 in September, significantly surpassing the previous month's increase of 36,000 and exceeding the market expectation of 70,000.
The rise in long-term rates also weighed on the stock market. The S&P 500 index initially rose but reversed course due to the increase in Treasury yields, closing down 0.25% at 7,651.5.
* This article has been translated by AI.
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