The two-year Treasury yield just posted its biggest single-day jump since April 2025.

The two-year Treasury yield just posted its biggest single-day jump since April 2025. The bond market is pricing a Fed that's getting more hawkish, but the Fed isn't speaking with one voice on how fast to go.

The trigger was October CPI. Core came in at 0.3% against a 0.2% forecast, the third straight hot core print, with headline up 0.4%. Governor Waller had said a half-point December hike may be needed, and Dallas Fed President Lorie Logan went further on the same day as the data.

She backs at least two more quarter-point hikes and said they may need to come at a quicker pace than officials have moved so far. Philadelphia Fed President Anna Paulson pushed the other way and called for gradual increases.

The market reaction was broad. The two-year closed at 4.73%, up from 4.56%, and the 10-year rose to 4.98% from 4.88%. Stocks and bonds fell together, the dollar rose, and the S&P 500 fell about 0.4%, halting a two-session winning streak.

Gold dropped 2.4% as yields neared 5%. When stocks and bonds sell off at the same time, there's no easy place to hide. Overnight, things are steadier: Reuters calls stocks resilient, and gold futures are up 0.6% at $4,053.

The part I'm watching is the gap between the hawks and the pricing. Fed-funds futures treat a quarter-point hike at the December 8-9 meeting as essentially locked in, with only about a 10% chance of the half-point Waller floated. Either the market is underpricing how aggressive this Fed wants to be, or the gradualists win the argument before December. I'd like to know which one you're betting on.

Sources:
Reuters (via The Edge Malaysia): https://theedgemalaysia.com/node/825230
Reuters: https://www.reuters.com/business/media-telecom/global-markets-global-markets-2026-11-11/
Rio Times: https://www.riotimesonline.com/global-economy-briefing-november-11-2026/

Not financial advice. For informational and educational purposes only.