US Treasury yields climb as Fed officials signal further rate hikes

On Thursday, US Treasury yields climbed, with the 30-year bond yield touching its highest point since 2004 after a series of statements from Federal Reserve officials indicating that further rate hikes may be necessary to tame inflation. Philadelphia Fed President Anna Paulson, New York Fed President John Williams, and Governor Michael Barr all signaled that the central bank could raise rates again. Market participants now see about a 70% chance of an additional increase at the Fed's October meeting, up from roughly two-thirds the day before.

The rally was amplified by a robust US purchasing managers' report and a weak auction of 5-year Treasury notes, while a later 7-year auction was described as soft but better than the previous one. The Treasury Department's ongoing buyback operation purchased more than $4 billion of 20- to 30-year securities, helping to shore up market liquidity.