Major US bond yields hit highest level since June 2008

New York
CNN Business

More bad news for everyone looking to buy a house: The reference Yield on 10-year treasury bills rose to around 4.22% on Thursday afternoon, the highest level since June 2008. Mortgage Rates, which now fluctuate just below 7%, tend to move at the same pace as the 10-year rate.

Many market experts believe that yields will rise further in the near term, thanks to rising expectations that the The Federal Reserve will raise interest rates by three-quarters of a percentage point at its November and December meetings. Still, investors brushed off fears of a rate hike – at least in the morning.

Why? Earnings.

Strong corporate profits from Dow

IBM components

chemical giant Dow

(yes, Dow

is in the Dow

) as well as telecom leader AT&T

helped lift the morale of Wall Street. The Dow

(DOW) rose in early trading but was down around 140 points by midday, or 0.5%. The S&P500 and the Nasdaq were each down about 1%.

All three indexes are still up for October, after plunging in August and September.

Investors may finally realize that inflation is not going away anytime soon and that the Fed will have to be aggressive to keep fighting it.

The strong jobs numbers (Initial Jobless Claims fell this week) allow the Fed to continue raising rates without worrying too much about how rate hikes might slow the economy just yet.

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