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Expand chart
Data: FactSet; Chart: Harry Stevens/Axios

The two-year Treasury yield is spiking to levels not seen since before 2008, and U.S. 10-year and 30-year Treasury yields are hitting levels not seen in more than five years, having climbed steadily since September.

Why it matters: The second-longest economic expansion in U.S. history (and longest job-market expansion) shows no signs of slowing, and that has investors driving up bond yields as the Fed continues its plan to gradually raise interest rates.

  • The policy-sensitive two-year Treasury note has steadily risen for the past few years, since the Fed laid out a path to finally "normalize" rates from virtually zero in 2008.

Driving the news: In remarks on Wednesday, Fed Chairman Jerome Powell said interest rates are nowhere near the neutral level that doesn't speed up or slow down economic growth. That comment was a departure from what analysts assumed when the Fed removed the word "accommodative" from its policy statement last week, so faster rate increases are expected.

  • In a separate speech this week, Powell said the Fed's projections of a continued strengthening economy is not "too good to be true."

What to watch: Friday's jobs report is key, especially if wage growth is stronger than economists are expecting (spurring inflation fears, which the Fed has said it's watching closely). Kathy Jones, a fixed income strategist at Charles Schwab, told Axios yields will push even higher, should the job report come in better than the expected 185,000 new jobs.

Go deeper

Updated 16 mins ago - World

German election: Exit polls show close race to succeed Angela Merkel

SPD leader Olaf Scholz. Photo: Alex Kraus/Bloomberg via Getty Images

BERLIN — Exit polls from Sunday's German elections showed the center-left Social Democrats (SPD) slightly ahead of the center-right Christian Democrats (CDU) in a tight election race to succeed Angela Merkel.

State of play: Official results were still rolling in, but a partial count showed the SPD ahead with 26% of the vote and the CDU on just over 24%.

Updated 44 mins ago - Politics & Policy

Liz Cheney: Americans deserve better than choice of Biden or Trump

Rep. Liz Cheney talks with Lesley Stahl on CBS' "60 Minutes." Photo: CBS News

Rep. Liz Cheney (R-Wyo.) told CBS' "60 Minutes" in an interview broadcast Sunday that Americans "deserve better than having to choose between" President Biden's "disastrous" policies and former President Trump, "who violated his oath of office."

Why it matters: Cheney made the remarks after CBS' Lesley Stahl put it to her in the interview that Republicans feel that her joining the House select committee in charge of investigating the Jan. 6 U.S. Capitol riot helps "keep the focus on Trump instead of on the shortcomings of the Biden administration."

5 hours ago - Politics & Policy

First look: The LCV's $4M ad buy

A screenshot from a new League of Conservation Voters ad supporting Rep. Stephanie Murphy.

The League of Conservation Voters and Climate Power are aiming another $4 million worth of ads at centrist House Democrats, urging them to support the climate provisions in President Biden’s $3.5 trillion budget reconciliation package, Axios has learned.

Why it matters: Progressive groups are trying to counter the onslaught of conservative money pouring into swing districts. Both sides are trying to define Biden’s Build Back Better Agenda and pressure lawmakers to support — or oppose — the legislation scheduled for a vote in the House this week.

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