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10-year Treasury yield retreats after rising to 5%

U.S. Treasury yields ticked lower Friday after rising to multiyear highs a day earlier as investors digested comments by Federal Reserve Chairman Jerome Powell.

The yield on the 10-year Treasury fell to 4.976%, down around 1 basis point. The 2-year Treasury yield was trading around 5.125%, down around 5 basis points.

On Thursday, the 10-year Treasury yield topped 5% for the first time since July 20, 2007.

Yields and prices move in opposite directions and one basis point equals 0.01%.

The move past 5% came after Federal Reserve Chairman Jerome Powell on Thursday warned that lower economic growth was likely needed to bring down stubbornly high inflation. He said said he didn’t believe monetary policy was too tight as it stands.

“Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said at the Economic Club of New York. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.”

He added, “Does it feel like policy is too tight right now? I would have to say no.”

Fed fund futures pricing reflects a nearly 99% likelihood that the central bank will keep rates the same at the conclusion of its November meeting, according to the CME FedWatch Tool. That’s up from about 94% a week earlier.

Read more:

Federal Reserve Chairman Jerome Powell speaks during a meeting of the Economic Club of New York in New York City, U.S., October 19, 2023. 

Powell says inflation is still too high and lower economic growth is likely needed to bring it down

CNBC’s Jeff Cox contributed to this report

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