US Treasury Sell-Off Intensifies as Inflation Fears Drive Yields Higher

US Treasury bonds are experiencing their largest sell-off since April 2025, driven by persistent inflation fears and expectations of aggressive Federal Reserve interest rate hikes. Yields surged sharply on Tuesday, with the 10-year note reaching 5%. The catalyst was October's consumer price index, which exceeded forecasts, alongside Fed official Christopher Waller's warning that a 50-basis-point rate hike should be considered in December. A weak $42 billion 10-year Treasury auction added further pressure, while falling oil prices failed to ease investor concerns. The sell-off spreads across the yield curve, with the 2-year yield jumping 21 basis points to 4.77%, its biggest daily move since the tariff crisis. Goldman Sachs suggests rate hikes could extend into 2027, raising borrowing costs for companies and households.