the 10year us treasury yield extended its rise above 4 on thursday heading for its highest level in almost three months after unexpectedly strong eurozone cpi data cemented worries about stubborn inflation and data suggested the strength of the us labor market may remain a concern for the federal reserve concerns that inflation will stay stubbornly high for longer than expected are pushing up treasury yields data from the eurozone showed an annual cpi inflation rate of 85 in february only slightly lower than januarys reading of 86 and above the 82 consensus forecast german 10year bund yields rose 24 basis points to 2737 the highest since 2011 meanwhile in us economic updates weekly initial jobless claims fell again at the end of february staying below 200000 for the seventh week in a row and us productivity was worse than initially forecast for the fourth quarter suggesting the strength of the labor market may remain a concern for the federal reserve on wednesday atlanta fed president raphael bostic reiterated the need for the policy interest rate to rise to between 5 and 525 meanwhile minneapolis fed president neel kashkari said he was openminded about the size of the feds next rate hike but leaning toward raising his estimate for the terminal rate from 54 in december markets are pricing in a 694 probability that the fed will raise its benchmark interest rate by another 25 basis points to a range of 475 to 5 on march 22 according to the cme fedwatch tool however the chances of a 50basispoint hike have climbed to 306 the central bank is mostly expected to take its fed funds rate target to at least 55575 by november according to 30day fed funds futures thats up since the start of the year when traders were betting that this socalled terminal rate would be below 5 what analysts are saying the fed is likely to take policy even more restrictive increasing the odds of a hard landing monetary policy works with a lag and once the savings buffer has been eliminated we think that consumption will slow also bond fund inflows have continued said priya misra and other rates strategists at td securities strong data remains a risk since a higher terminal rate will drag the 10y rate higher as well