Money markets price three more Fed rate hikes over next year
Bond yields have climbed to multi-year highs as traders bet on further tightening from the Federal Reserve.
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Chart: US10Y, US 10-year Treasury yield, one-minute prices, three sessions
Money markets are pricing three additional Federal Reserve rate hikes over the next year, as investors demand higher returns for holding long-term government debt.
The 10-year Treasury yield has risen to 5.17%, and the 30-year yield has climbed to its highest level since 2004.
Brent crude has settled near $107 a barrel, and the bond market volatility has weighed on US stocks, which have wavered in recent sessions.
Trump and Xi discussed artificial intelligence competition during Xi's visit to Washington, after the two countries extended their trade truce to January 10. The market has already been pricing in both Fed tightness and geopolitical risk over recent sessions, with yields at multi-year highs and stocks unsettled by inflation concerns. Three additional rate hikes fit the pattern already driving that volatility, while the AI talks mark incremental progress on trade rather than a firm concession from either side. For now, the exchange reinforces the holding pattern in markets rather than shifting it.