10-Year Yield Back at 5.33% Ahead of $39B Auction Today
The U.S. 10-year Treasury yield climbed back above 5.3% this morning. It sits near 5.33%, about 6 basis points above Tuesday's close. Monday's 5.35% peak was the highest since 2002.
The bond market faces two tests today. The Treasury auctions $39B of 10-year notes at 1:00 p.m. ET (8:00 p.m. in Istanbul). Minutes of the Fed's September meeting follow at 2:00 p.m. ET (9:00 p.m. in Istanbul).
In September the Fed raised rates 25 basis points to a 3.75%-4.00% range. The vote was 12-0. Sixteen of 18 participants projected at least one more hike in 2026.
Markets now price only a 22% chance of an October hike. Fed expectations are not what is holding yields up; bond supply is.
This week brings $119B of 3-, 10- and 30-year auctions. Oil prices, a widening budget deficit and debt raised for AI spending are also pushing yields higher.
SpaceX is the latest example of that debt. According to the Financial Times, it is seeking $40B of financing to buy Nvidia chips. The package splits into $10B of bank loans and $30B of investment-grade bonds.
Apollo is leading the deal, and Pimco is in talks to lend. SpaceX shares closed down 0.5% at $171.92 on Tuesday and fell another 1.2% after hours. rose 0.3% on Tuesday.