Traders work on the floor of the New York Stock Exchange (NYSE) in New York, United States, September 28, 2026.
Brendan McDermid | Reuters
U.S. Treasury yields climbed Thursday as traders digested comments from a senior Federal Reserve official while awaiting another long-term bond auction.
The benchmark 10-year Treasury yield was more than 5 basis points higher at 5.328%, near its highest level since 2002. The 30-year Treasury bond yield rose more than 3 basis points to 5.694% after trading just below a 24-year high in the previous session. THE Cash flow over 2 years the note yield increased by more than 4 basis points to 4.81%.
One basis point is 0.01%, and yields and prices move in opposite directions.
Fed Governor Christopher Waller said Thursday that further hikes were needed to bring down inflation after about five and a half years above the central bank’s 2% target, but suggested rates did not need to be raised immediately.
“There is no need for the hikes to be carried out in consecutive meetings,” Waller told a Central Bank of Turkey forum in Istanbul.
“But they should be in place within an acceptable time frame.”
His comments come a day after the minutes of the central bank’s September meeting. Officials expect they will raise interest rates again before the end of the year to combat inflation.
Investors expect the Fed to keep rates unchanged at its next meeting on October 28 and trigger a hike on December 9.
Long-term auctions loom
Investors are eagerly awaiting the third Treasury auction this week, which will take place after noon. The Treasury sold $39 billion of 10-year notes on Wednesday, with global central banks accounting for more than 80% of the bidding, above the auction average of 72.4%.
The department sold $58 billion of 3-year bonds on Tuesday and is expected to sell $22 billion of 30-year bonds on Thursday.
“The 10-year auction has set the tone for the Treasury market – at least for now,” Ian Lyngen of BMO Capital Markets said in a note Wednesday evening.
“While the scale of the sale between the September reopening and today’s auction could have been a reason to keep bidders away, we are heartened by the sponsorship, even though this is the most profitable 10-year auction since November 2000.”
Lyngen added that Thursday’s long-term bond auction will be “the next barometer of demand for U.S. debt in an environment of global deficit anxiety.”
Investors will also await the release of the first weekly jobless claims on Thursday and Michigan’s preliminary consumer sentiment survey for October on Friday.
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