US Treasuries Hit by Fierce Selloff as Inflation Data and Hawkish Fed Talk Shake Rate Bets

Nov. 11 – According to Gelonghui, US Treasuries suffered one of their worst selloffs since April 2025 as inflation came in above expectations and Fed officials warned they may step up the pace of rate hikes. On Tuesday, the yield on 2-year US Treasuries, which is more sensitive to shifts in Fed policy than longer-dated bonds, surged as much as 21 basis points to 4.77%, the largest single-day rise since Trump's reciprocal tariff measures sent global markets reeling. The move marked another sharp reversal in the bond market. Since early last month, Treasuries had rallied strongly as tech stocks slid and oil prices pulled back. But on Tuesday both of those drivers were cast aside, and market focus shifted back to the inflation pressures the Fed has struggled to contain since the pandemic.

The selling pressure began with remarks by Fed Governor Waller. He said that if inflation continues to accelerate, he would support raising rates by 50 basis points at once. After US October consumer price index (CPI) data came in above economists' expectations, traders began pricing in the possibility of a large Fed rate hike in December. Comments from Dallas Fed President Logan further reinforced that expectation. She said at least two more 25-basis-point rate hikes are needed, and that the Fed may need to start moving at a faster pace.