The US 10-year Treasury yield hovered around 5.32% on Tuesday, holding near its highest level since 2002 as the global bond selloff continued amid mounting fiscal concerns and persistent inflation. The pressure extended across international debt markets: French government bond yields reached their highest levels in more than two decades, reflecting worries over heavy public debt loads and ongoing political gridlock. Spanish yields also rose on Monday after Prime Minister Pedro Sánchez called a snap general election for November 29.
In the US, the latest ISM survey indicated that input cost pressures in the services sector accelerated at their fastest pace in more than four years last month, underscoring lingering inflationary forces. Even so, futures markets are pricing in roughly a 78% probability that the Federal Reserve will keep interest rates unchanged at its upcoming meeting, following weaker-than-expected employment data. Investors are now focused on Wednesday’s release of the Fed’s meeting minutes for further insight into policymakers’ outlook and the likely path of future rate decisions.