10-year Treasury yield moves to 5.17% as traders weigh producer price report

The 10-year US Treasury yield rose to 5.17% as investors assessed producer price figures showing persistent inflation. The data strengthened expectations that the Federal Reserve will raise interest rates next month, which could increase borrowing costs across the economy.

Producer prices rose 0.3% in October from September, below economists’ 0.4% forecast, but were up 6.5% over the year, the largest annual increase since November 2022. Core producer prices rose 0.5%. Traders priced in a certain rate rise at the Fed’s 9 December meeting, with an 89% chance of a quarter-point increase and around 14% for a half-point rise. US oil futures slipped 0.2% to $88.56 a barrel, while Brent edged up to $95.84.