US 2-year Treasury yield jumps 17 basis points to 4.73% on Nov 10 after hot inflation

Short-term yields rose the most after the October inflation report

The US Treasury's par yield curve shows the yields on government debt across maturities. These yields measure what the government pays to borrow and what markets expect from interest rates. Yields jumped on November 10 after a hot October consumer price index (CPI), which tracks prices consumers pay. Moves were measured in basis points (bp), or hundredths of a percentage point. The 1-year to 5-year part of the curve moved the most:

• 1-year: 4.38% to 4.56% (+18bp)
• 2-year: 4.56% to 4.73% (+17bp)
• 5-year: 4.67% to 4.81% (+14bp)
• 10-year: 4.88% to 4.98% (+10bp)
• 30-year: 5.26% to 5.35% (+9bp)
• 3-month: 4.24% to 4.30% (+6bp)

The 1-month yield barely moved, going from 4.04% to 4.05%.

The 2-year yield has erased its whole drop after the midterm elections

The 2-year yield was 4.46% on November 5. It is up 27bp in three sessions. It is back near late-October levels. It was 4.70% on October 27.

The yield curve flattened as yields rose

The gap between the 2-year and 10-year yields narrowed from 32bp to 25bp. This pattern fits a market adding to bets on a December rate hike. It does not fit a market demanding more extra yield for holding longer-term bonds. The 10-year yield is back just under the 5% mark. It fell below that level on October 22.

Federal debt changed little

On November 9, total public debt outstanding was $40.560tn (trillion dollars), up about $7bn (billion dollars) on the day. Debt held by the public was $32.764tn. Intragovernmental holdings, which is debt one part of the government owes another, were $7.796tn.