Stopgap legislation that averted a shutdown of the federal government this past weekend removed a near-term uncertainty in financial markets, enabling Treasury yields to resume their climb back to some of the highest levels in at least a dozen years on Monday.
“Stocks are facing headwinds from higher interest rates and the uncertainty of how higher rates will affect economic growth and earnings,” Saperstein said in an email on Monday. As markets begin the historically volatile month of October, “we expect continued downside volatility as the market grapples with higher oil prices, the restart of student loan repayments and the impact of higher interest rates continuing to slow the economy and impact earnings.
Also in New York morning trading on Monday, the yield on the 2-year Treasury BX:TMUBMUSD02Y advanced 7.3 basis points to 5.119%, heading for Thursday’s closing level of 5.148% — which was the highest since July 18, 2006. The 10- BX:TMUBMUSD10Y and 30-year rates BX:TMUBMUSD30Y respectively jumped by 11.8 and 9 basis points to 4.69% and 4.799% on their way to the highest levels since Aug. 15, 2007, and April 6, 2010.