Fidelity's Jurrien Timmer attributes bond yield rise to sticky inflation and fiscal risk

Jurrien Timmer, Director of Global Macro at Fidelity Investments, stated that the rise in yields this year was multi-factorial, including sticky structural inflation and mounting fiscal risk, rejecting a simpler narrative involving growth and AI capital spending worries. Last week, the 10-year Treasury yield pulled back 14.6 basis points, though it briefly touched 5.33% after the October 14 report. While the recent CPI reading showed annual inflation at 3.7% against 3.6% expected, current market sentiment suggests little pressure for the Federal Reserve to raise rates at its October 27-28 meeting, with CME Group’s FedWatch putting the odds at 17.2%.