2017.10.1900:30:00UTC+00U.S. Treasury Yields Rally as on Solidified Bets of December Rate Hike

Prices of U.S. government bonds declined, driving yields higher, as speeches from top Federal Reserve officials bolstered expectations that an interest rate hike move will be made by policymakers in December, increasing pressure on Treasury.

The two-year Treasury note yields, responsive to changing expectations for Fed policy, edging up a basis point to 1.563 percent, a fresh 10-year high since October 2008. The move on Wednesday added to an overall increase of 8 basis points this month.

The benchmark 10-year Treasury note yield, rising 4 basis points to 2.339 percent, the biggest single-day increase since September 27, the 30-year bond yield rose five basis points to 2.85 percent.

Philadelphia Fed President Patrick Harker, a voting member of the FOMC said the U.S. central bank should lift rates one more time this year, according to The Wall Street Journal. However, he tempered his comments, stating that his outlook for more monetary tightening could shift if inflation continues to be below the target rate. Meanwhile, New York Fed President William Dudley said the central bank was on its path to hike rates three more times next year.

Data from CME Group shows traders in the fed-futures market are betting on a 92 percent chance of a rate hike in December 17, up from the 83 percent last week.