Treasury yields retreat, while Dec Fed rate hike bets rise above 80%

Treasury yields are losing altitude in Asia following the sharp rally on Wednesday, while the December Fed rate hike bets as shown by the Fed funds futures moved back above 80%.

At the time of writing, the benchmark 10-yr yield lost more than seven basis points to trade at 1.99%. Meanwhile, at the short-end of the curve, the 2-yr yield shed three basis points to trade at 0.862%.

The 10-year Treasury yield on Wednesday surged the most in three years to trade above 2%, its highest level seen since January, on expectations that ‘Trumponomics’ will eventually lead to higher inflation and higher rates.

Meanwhile, Dec Fed rate hike bets had dropped briefly to 76% on account of the risk-off in the markets.