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After being range-bound for months, yields on the 10-year Treasury broke through the top of a range that’s held since mid-July. Yields ended the week at 1.45%. The 50-day moving average on 10-year yields was 1.29% on Friday.

The 2021 low, set in August, was 1.13%. The high yield, set in March, was 1.77%.

Monday morning (September 27) the yield on the 10-year Treasury climbed to 1.48%.

It’s tough to read a long term trend into this move with all that noise and fury out of Washington about a possible government shutdown at the end of September and a potential (“selective” default–if there is such a thing) sometime in October if Congress doesn’t raise the debt ceiling. That uncertainty is likely to be affecting Treasury prices (sending them downward especially at the shorter end of maturities and especially for paper due to mature during any debt ceiling crisis.)

But it’s likely that the Federal Reserve’s recent talk about a potential reduction beginning in November in the $120 billion in Treasuries and mortgage-backed assets the central bank has been buying each month is also pushing up yields. And that bond traders and investors are reacting to this month’s dot plot showing that members of the Federal Reserve’s Open Market Committee have moved projections toward more frequent and earlier interest rate increases.

The move is also likely to be a reaction to a sense that the thinking at global central banks is shifting toward increases in interest rates. The Bank of England, for example, has talked about raising interest rates as early as November.

Bond traders are now thinking that the floor on yields is moving up to 1.5% to 1.6%.

A lot of the timing on that move depends on continued economic strength in the United States. Next potential market moving indicator is the September jobs report due on October 8 before the market open.