The 10-year Treasury yield shot up 0.15 percentage point to 5.11%, its highest since 2007, in the bond market's worst day in over a year. The selloff was driven by a hot manufacturing PMI, rising oil prices, weak demand at a 5-year note auction, and Fed Governor Michael Barr's comment that more rate hikes are needed. Mortgage rates are heading toward 7%. The S&P 500 fell 0.8%, with utilities and real estate leading declines. Gold dropped nearly 2% while the dollar gained 0.5%. Market-implied odds of a Fed rate hike in October have risen to nearly 70%. What happens next remains unclear.
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