Short-bond positioning has driven the benchmark 10-year US Treasury yield toward the 5% threshold ahead of US CPI, the release that will shape Fed rate expectations. The 10-year climbed 18 bps this week and traded just under 5%; it was 4.98% on Friday, the highest since 2023 and approaching the 2007 peak. Traders cite rising oil and persistent inflation running above the Fed’s target for five years as upward pressure. Markets price roughly a 70% chance of a Fed hike at the Sept. 16 meeting. ING

Short-bond positioning has driven the benchmark 10-year US Treasury yield toward the 5% threshold ahead of US CPI, the release that will shape Fed rate expectations. The 10-year climbed 18 bps this week and traded just under 5%; it was 4.98% on Friday, the highest since 2023 and approaching the 2007 peak. Traders cite rising oil and persistent inflation running above the Fed’s target for five years as upward pressure. Markets price roughly a 70% chance of a Fed hike at the Sept. 16 meeting. ING Americas head of research Padhraic Garvey said a 5% 10-year now looks inevitable and called the period worrying for the bond market.