Treasury Yields Hover at 5% as Bonds Reopen, With a December Fed Hike Priced and Goldman Adding a March Rise

Saxo's Asia note for Thursday had the 2-year up 4 basis points to 4.77 percent, the 10-year little changed at 4.99 percent and the 30-year down 2 basis points to 5.33 percent. It also said the Bloomberg Dollar Spot Index rose 0.4 percent on Wednesday to its highest since May 2025.

How likely is a Fed rate hike in December?

Very. Markets have fully priced a quarter-point rise at the 8 and 9 December meeting. The size of it is the open point. Reports differ on the chance of a half-point move: Kitco's Wednesday evening report put it at 12.9 percent, while the Reuters-based figure cited by The Star was 10.4 percent, a spread that reflects different snapshots of the CME FedWatch tool rather than any new decision.

The officials are not helping to cool it. Fed Governor Christopher Waller, speaking in London at a Bank of England conference, said a 50 basis point hike should be considered in December, according to CNBC, and that he would support “more robust action” if inflation came in above expectations. Chicago Fed President Austan Goolsbee called the report borderline disturbing, and Philadelphia Fed President Anna Paulson said further gradual hikes seem appropriate, investingLive reported.

What is Wall Street forecasting for the Fed?

Goldman Sachs now expects two quarter-point increases, one in December and one in March 2027, with the first cut pushed back a quarter to December 2027, according to the same investingLive report, published on Wednesday. It said Goldman expects most Fed officials to signal a third hike in the December projections. The bank cited three straight months of hotter-than-expected inflation, with oil and the Middle East escalation feeding through.

The fuel for the next move is data. CNBC listed wholesale inflation, the producer price index, as due on Friday, after a jobs report that it described as stronger than expected, with job gains more than double the forecast. A producer price number that matches the consumer report would keep the half-point argument alive; a soft one would give the bond market room to breathe below 5 percent.