30-Year Treasury Yield Hits Fresh 2002 High After ISM Services Report

The yield on the 30-year US Treasury bond climbed to a fresh high not seen since 2002 on Monday, rising 6.2 basis points to 5.691%. The 10-year Treasury note yield added 6.0 basis points to 5.337%, while the 2-year yield increased 2.5 basis points to 4.850%. The advance came as investors weighed the latest ISM report on US services sector activity.

That report showed services activity expanded in September, though at a slower pace than before. A sharp rise in prices paid by businesses stood out: the Price Index reached 74%, its highest reading since July 2022. The figure raised concerns that inflationary pressures could be building again.

According to Breaking The News, the data could convince the Federal Reserve to keep interest rates higher. The central bank is scheduled to publish minutes from its policy meeting this week. Those minutes may give a clearer picture of its decision to raise interest rates by a quarter of a percentage point last month.

The session's moves were led by longer-dated debt, with the 30-year yield gaining more than the 2-year yield. The 30-year bond's rise to 5.691% marked its highest level in more than two decades. Shorter-term yields also finished higher, leaving all three key maturities up on the day.

Investors now turn to the Fed minutes for further detail on the rate-setting discussion. The release could shed light on how officials viewed inflation and growth at the time of last month's quarter-point increase. Markets will also continue to assess incoming economic data for signals on the rate path.