Six-Month Treasury Yield Begins to Price in One More Rate Hike

May 22, 2023

by Wolf Richter Wolf Street

Either mid-June or possibly in July.

Treasury yields and mortgage rates rose essentially all week and passed some milestones for the first time since the collapse of Silicon Valley Bank:

— The six-month yield hit a 22-year high (5.38%) — The one-year Treasury yield edged above 5% — The 10-year Treasury yield rose to 3.7% — The 20-year Treasury yield edged past 4% — The 30-year Treasury yield rose to nearly 4% — The average 30-year fixed mortgage rate rose to 6.90% (Mortgage News Daily).

But what is really interesting is the action in the six-month yield (securities that mature in November): Buyers and sellers in this section of the bond market got over their bank-panic and now are starting to price in another rate hike.