Rates Jump Higher by 10-20bps in Disorderly Session

10-year Treasury yield crests 3.70% in first full trading session post Fed decision. Treasury yields surged to multiyear highs after numerous central banks followed the Fed’s hawkish lead, forcing the 10-year note to close over 3.70% for the first time in a decade. The Bank of England announced quantitative tightening, while the Bank of Japan was forced to intervene in its currency market. Meanwhile. the 2-year note rose for the 11th straight session, rising over 12 bps to 4.12% by the day’s end. This extensive bond selloff weighed heavily on equities, with the tech-heavy NASDAQ suffering ~1.40% losses and S&P 500 decreasing 0.87% on the day.

Initial jobless claims signal continued job market strength. Initial jobless claims ticked up by 5000 to 213,000 for last week. The increase was less than expected, with consensus estimates at 217,000. Jobless claims continue to remain fairly low, a data point that for now continues to support the Fed’s hawkishness. Continuing claims, also released today, were much lower than expected at 1,379,000 compared to the estimated 1,418,000.

Day Ahead. Fed Chairman Powell will speak at the “Fed Listens” event tomorrow at 2:00 PM EST. There will also be PMI releases for the month of September at 9:45 AM ET.