10-Year Treasury Yield Rebounds as Equities Hit Record Highs Ahead of FOMC Meeting

The 10-year Treasury yield ROSE 5 basis points, clawing back from Thursday's 4 bps decline triggered by hotter-than-expected CPI data and jobless claims. This recovery coincides with the S&P 500 notching a historic peak at 6,594.54, suggesting growing risk appetite among investors.

Market dynamics reveal a clear rotation from bonds to equities. As bond prices fall on selling pressure, yields inevitably rise—a fundamental inverse relationship playing out in real time. The yield curve's movement reflects nuanced expectations beyond simple rate-cut arithmetic.

All eyes now turn to the Federal Reserve's September meeting, where a 25 bps rate cut appears imminent. The 10-year yield's trajectory will hinge not just on Fed action, but on how markets interpret longer-term inflation and growth signals. This delicate balance between monetary policy and macroeconomic fundamentals could redefine asset allocation strategies in coming weeks.