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10-year U.S. Treasury Yield Hits Three-Month High as Sell-Off Continues

The rate sell-off continued and equities fell hard on weak economic data and debt-ceiling anxiety in Washington. The 10-year U.S. Treasury yield increased another 5 bps to close at 1.54%, its highest close since June, and is up 22 bps since the Fed announced its recent policy decisions last Wednesday.

Both Fed Chair Powell and Treasury Secretary Yellen testified today in the Senate and commented that a failure to raise the debt ceiling would be devasting to the economy. Secretary Yellen warned that the Treasury has until October 18th before it will run out of money. Today’s economic data showed contraction in business activity in the U.S. Mid-Atlantic region and consumer confidence hitting a seven-month low. Equities were hit hard on the day with the tech-heavy NASDAQ falling 2.83% as investors grow wary of rising yields.

Consumer confidence falls to a seven-month low. As increasing prices and the COVID delta variant continued to drag down sentiment, consumer confidence dropped for the third straight month to 109.3. The Conference Board’s monthly survey showed that consumers’ appetite for large purchases, such as autos and homes, continued to retreat in September. Further, consumers’ outlook dampened as the Board’s expectations index hit its lowest level since November 2020.

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