10-Year Treasury Yield Reclaims 5% as Hot CPI Fuels Rate Bets

The 10-year U.S. Treasury yield climbed above 5% Tuesday before easing to 4.992%, as hotter October inflation and hawkish comments from Federal Reserve Gov. Christopher Waller put borrowing costs and rate expectations in focus for U.S. crypto markets.

The yield was last 13 basis points higher on the day. The two-year yield, which tracks near-term Fed rate expectations, rose more than 18 basis points to 4.736%, while the 30-year yield gained more than nine basis points to 5.352%.

The Consumer Price Index (CPI) rose 0.4% in October, above a 0.3% forecast. Core CPI, which excludes food and energy, increased 0.3%, topping the 0.2% forecast. A $42 billion 10-year note auction also weighed on Treasury prices, which move opposite to yields.

Waller said a 50-basis-point rate increase should be considered at the Fed’s December meeting if inflation readings are higher than expected. Markets had largely priced a 25-basis-point increase for December. Wholesale inflation data due Friday could shape future Fed decisions.