Treasury Yields Rise on Robust Durable Goods Orders Report — Market Talk

What happened

Treasury yields reversed early declines and rose as markets waited for the Fed decision. September durable goods orders rose 1.8%, slightly above a WSJ consensus, led by transportation equipment. The 10-year yield rose to 4.997% from 4.987% and the two-year to 4.731% from 4.712%.

Confirmed

Global impact / market context

Stronger durable goods orders suggest companies are spending on long-lasting equipment, which can support revenue and hiring. That strength may keep the Fed cautious about cutting rates, so borrowed money stays costly, pressuring capital spending and stock valuations that depend on cheaper future cash flows.

Analyst inference

Markets expect the Fed to hold rates and resume hikes in December. Yields rising after the orders report show investors see firmer growth as a reason for tighter policy, which lifts the return on government debt and can pull money away from riskier assets.

Analyst inference

What to watch

1. The Fed decision comes tomorrow, and markets expect rates to stay on hold with hikes resuming in December, which means borrowed money costs may remain high. Confirmed
2. Watch whether Fed officials signal a December rate increase, since a clearer plan to raise rates could push Treasury yields higher again. Proposed
3. Track the 10-year yield near its current level, because holding at that level could raise borrowing costs for companies and weigh on stock valuations. Analyst inference

Evidence

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