Another Big Move Higher in Rates Sees 10-Year Breach 3.10%

Yields rise with Fedspeak and Jackson Hole build-up the main catalyst. Treasury yields rose overnight after Minneapolis Fed President, Neel Kashkari, relayed his “big fear” that inflation is embedded at a higher level than perceived. Adding fuel to the fire was today’s 5-year note auction, where the bond yield was stopped out at 3.23% due to low demand after the overnight yield spike. The 10-year yield ended the day at 3.109%, up 6 bps from yesterday.

U.S. durable goods orders and EIA gasoline stocks data come in at lower levels than expected. The U.S. durable goods orders were unchanged from July, coming in at 0% MoM, 0.6% lower than the forecast. This was the first month over the past five where orders showed no growth, which was mostly due to a 0.7% decline in orders for transport equipment. In other news, U.S. gasoline stocks decreased by .027 million barrels in the week that ended August 19th, much smaller than the predicted 1.464 million decrease.

Day ahead. The Jackson Hole Fed meeting continues tomorrow, where conversations about the upcoming FOMC meeting will be at the forefront. There are also data releases tomorrow, including the initial jobless claims and GDP growth rate reports at 8:30 AM ET.