US bond yields hit 16-year high amid rate worries

The news: Yields on benchmark 10-year US Treasury notes have jumped after US job openings rose more than expected in August, fueling fresh worries over interest rates.

The numbers: The 10-year Treasury note surged more than 12 basis points on Tuesday to hit 4.806%, its highest yield since August 2007. Traders now see the Federal Reserve cutting rates from 5.25%-5.50% currently to only 4.7%, instead of the 4.3% they previously anticipated.

The context: The surge in yields comes amid a selloff in the bonds market globally, particularly in longer-term Treasury notes, as investors expect interest rates to remain higher for longer. Central banks are pushing back against rate cut bets as inflation remains elevated and economies stay resilient. That is compounding worries about the fiscal outlook. Bond yields determine governments' funding costs, so the longer they stay high, the more they feed into the interest costs countries, businesses and consumers pay.