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Treasury Futures Drop

Treasury Futures Drop

U.S. Treasury futures fell Wednesday amid expectations of tighter monetary policy after October inflation came in above forecasts and employment data proved strong, while the 10-year yield remained above 5.01%. Markets priced in the possibility of a 25-basis-point rate hike at the December 9 meeting, while the odds of a 50-basis-point increase rose to around 15%. Markets also expected three consecutive hikes by the middle of next year. The market is preparing for a $25 billion auction of 30-year bonds, with the coupon expected to be 5.25%—the highest for a new issue since 2001.

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