S&P Global reports that US private sector expansion hit a 5 year peak in September, driving yields across the government bond curve upward. The Composite PMI rose to 58.4, while Services and Manufacturing PMIs reached 58.7 and 57.0, both exceeding analysts' forecasts. In response, the 10 year Treasury yield hit 5.081%, its highest level since July 2007, and the 30 year yield surged above 5.37%, the highest daily settlement since June 2004.

The growth was supported by robust demand, though input costs jumped at the steepest rate in four years due to rising oil, fuel, and transport prices. These factors point to annualized growth of about 5% and a 4% gain for the third quarter. Bond markets are now pricing in a 69% to 70% chance that the Federal Reserve will hike interest rates in October, which would be the first instance of consecutive rate hikes since May 2023.