2026.10.0115:40:49UTC+00Treasury Sell-Off Eases

The yield on the US 10-year Treasury note climbed above 5.3% on Thursday, its highest level since early 2002, before easing slightly to 5.27%. The bond market remains under pressure amid expectations of further monetary policy tightening by the Federal Reserve, as persistent inflationary forces—driven by higher oil prices and ongoing uncertainty surrounding the Middle East conflict—weigh on sentiment.

Additional pressure stems from concerns over the US fiscal and debt outlook, as well as resilient economic data. While the ISM Manufacturing PMI edged lower in September, it continued to signal solid manufacturing activity, and the prices paid component surged.

Investors are now focused on tomorrow’s jobs report, which will offer an updated read on labor-market conditions and help shape expectations for the Fed’s next policy steps. Markets have fully priced in a 25 bps rate increase by the Fed this year, although the implied probability of a hike in October has dropped to 34%, from 70% a week earlier.