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10-year yield +3bp to 4.48%

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'Red sweep' and inflation may slow rate cuts, analyst says

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Market prices 83% chance of Dec. rate cut

SINGAPORE, Nov 14 (Reuters) - U.S. bonds fell on

Thursday pushing 10-year yields to their highest since July as

investors bracing for the incoming Donald Trump administration

and sticky inflation demanded higher returns.

Benchmark 10-year yields rose a little more

than three basis points to touch 4.483%, a four-and-a-half-month

high. Two-year yields rose 3.5 bps to 4.319%.

Yields rise when bond prices fall.

Bond prices have been falling for months as a strong U.S.

labour market and then the election of Donald Trump as President

and Republicans into majorities in Congress have driven

expectations of deficits and a stickier inflationary outlook.

On Wednesday data showed U.S. consumer prices rose in

October. That was expected but still unsettling for markets that

have priced in 75 basis points in interest rate cuts between now

and the end of 2025, especially as Trump's promises for cutting

taxes and immigration are seen as widening budget deficits and

putting upward pressure on inflation.

"Normally to me that expected CPI print would lock in a 25

point cut in December, but things have changed dramatically with

Trump's election and the 'red sweep,'" said ATFX Global market

analyst Nick Twidale.

"Although any policy implementation impact won't be seen in

the data until later in 2025 I think the Fed will be more

hesitant in the pace of rate cuts in the next couple of

quarters."

Markets have priced about an 83% chance of a 25 bp U.S. rate

cut next month, though Fed funds futures fell slightly

in Asia and Fed officials sounded wary on inflation risks.

"Inflation isn't going anywhere fast," said ING economist

Rob Carnell. "4.5% is not a stupid number for the 10-year and

potentially 5% should be considered a possibility."

Thirty-year yields rose 1.4 bps to 4.651%.

(Editing by Shri Navaratnam)