Treasury Selloff Lifts 2-Year Yield 21 Basis Points to 4.77%

A sharp rise in the U.S. 2-year Treasury yield and renewed support for larger Fed hikes put the interest-rate outlook back in focus for crypto markets as inflation ran above expectations.

The yield briefly climbed 21 basis points to 4.77%, its largest one-day increase since market turmoil over President Donald Trump’s reciprocal tariff measures. The 2-year yield is more sensitive to expected Federal Reserve policy changes than longer-term Treasury yields.

Fed Gov. Waller said he would support a one-time 50-basis-point increase if inflation continued to accelerate. After October’s consumer price data topped economists’ expectations, traders began factoring in the possibility of a larger Fed rate increase in December.

Dallas Fed President Logan added to the hawkish outlook, saying at least two more 25-basis-point increases were needed and the central bank might have to accelerate its pace. U.S. Treasuries had rallied since early last month as technology shares fell and oil prices declined, but Tuesday’s trading shifted attention back to inflation pressures the Fed has struggled to contain since the pandemic.