10-year Treasury yield reaches level not seen in more than 15 years

The benchmark 10-year Treasury yield rose Wednesday, reaching its highest level in more than 15 years, as traders weighed fears of persistent inflation and tighter monetary policy for longer than expected.

The 10-year Treasury yield gained 5 basis points to 4.612%. It had risen as high as 4.566% on Tuesday, its highest level since 2007. The 2-year Treasury yield also added 6 basis points to 5.139%.

Yields and prices have an inverted relationship and one basis point equals 0.01%.

The Commerce Department reported Wednesday morning that orders for durable goods rose 0.2% in August, topping the 0.5% decline expected by economists surveyed by Dow Jones.

Investors considered the state of the economy as various key data points missed forecasts on Tuesday. Both August’s new home sales and September’s consumer confidence index came in below estimates.

That comes as the Federal Reserve suggested last week that interest rates would go higher still and remain elevated for longer, prompting concerns among investors about what it could mean for the economy.

Elsewhere, concerns continued over a potential U.S. government shutdown, which could begin as early as Oct. 1 unless Congress agrees on a deal to fund the federal government before then.

A shutdown could negatively affect the U.S.’ credit rating, Moody’s rating agency warned earlier this week, while Wells Fargo noted that it could lead the U.S. dollar index to decline. President Biden on Tuesday called on Congress to resolve the issue.