DJ Treasury Yields Seen as Reaching a Ceiling

Treasurys are in “frantic trading as traders act on emotions,” which could mean a near-term top for yields may have been reached, Spartan’s Peter Cardillo tells WSJ. The 10-year is now at 4.216%, down from an intraday high of 4.325% reached early in the morning. The two-year is at 4.504%, down from 4.642% in the morning. Cardillo expects the two-year to float around 4.5% for the time being, reflecting the market’s expectations of how high the Fed will bring the fed funds rate, which could reach that level in December. Fed officials “need to talk tough,” but they are likely to stop hiking before causing a deep recession, Cardillo says.