Fed unlikely to ignore lurch higher in 10-year Treasury yield, says Siebert CIO
The 10-year Treasury yield’s sharp jump since the Federal Reserve’s September interest-rate cut will be hard for the central bank’s rate-setting committee to ignore heading into next week’s policy meeting, according to Mark Malek, chief investment officer at Siebert.
While the Fed pivoted to rate cuts in September in “trying to take its foot off the brakes” of the U.S. economy, Malek said financial conditions have tightened based on long-term borrowing rates used to finance the economy — with the benchmark 10-year rate at 4.36% on Friday, its highest since July.
After the jobs report, traders were turning their eyes back to the neck-and-neck election, Malek said in a phone interview. He said recent extreme volatility in rates can be pegged to election jitters and deficit concerns, but that bond traders also have been “wearing their emotions on their sleeves.”