A brief decline in yields following cooler PCE inflation data on Wednesday failed to hold. The 30-year yield subsequently reached 5.641% and the 20-year hit 5.685%, both their highest levels since 2002. The 10-year had reached 5.28% on Tuesday, its highest since 2007.
The bond market was pricing in four more Fed increases of 25 basis points each by June 2027, compared with expectations nine months earlier for at least 100 basis points of cuts by then. Higher borrowing costs are already reaching homebuyers: the average US 30-year fixed mortgage rate rose to 7.45% on Sept. 24.