US yields move to multi year highs as the wall of worry is growing.

US Treasury yields are trading at highs across the curve. The 10-year yield is above 5.09%, and the 30-year is near 5.39%. The question for traders is whether yields can stay at these levels as the market weighs strong growth against the risk of more inflation. At the time of the yield snapshot: 2-year: 4.8952%. The last comparable daily reading was 4.92% on May 30, 2024. 5-year: 4.9828%. The last comparable daily reading was 5.01% on July 13, 2007. 10-year: 5.0913%. The last comparable daily reading was 5.11% on July 13, 2007. 30-year: 5.3891%. The last comparable historical reading was 5.42% on July 28, 2004. The data are giving the Fed little reason to relax Today’s flash S&P Global US composite PMI rose to 58.4 from 56.0 in August, pointing to stronger business activity. That follows an August employment report that added 162,000 jobs, well above the 56,000 expected in a Reuters survey. Inflation was less encouraging: August consumer prices rose 0.4% on the month and 3.4% from a year earlier. Gasoline rose 3.9% in August, while prices excluding food and energy rose 0.3% on the month. The Fed commentary reflects that combination. Richmond Fed President Tom Barkin said yesterday that inflation risks outweigh employment risks and pointed to the rebound in job gains and continued consumer spending in explaining last week’s rate hike. In other words, policymakers are seeing price pressure at a time when the economy has remained firm enough to handle tighter policy. Higher oil, gasoline and diesel prices add another concern. Diesel helps move goods by truck and rail and powers farm equipment. Higher fuel costs can work their way into transportation, farming, food processing and delivery costs. How much businesses pass through to customers will help determine whether the energy shock becomes a broader inflation problem. Could policy provide some relief? There is a potential counterweight to that inflation story. President Trump has said he supports examining restrictio