datoid

The 10-Year Treasury yield jumped to 9.93% on October 9, 1979, representing a 4.0 standard deviation move above its 60-day average of 9.16%. This followed a steady climb from 9.12% in late August. This spike occurred alongside record-high inflation (CPI at 332.41) and record-low unemployment (4.30%), creating a rare economic environment of simultaneous price pressures and labor market tightness. Such extreme yield movements typically signal major shifts in monetary policy expectations or economic fundamentals. What factors drove this dramatic bond market reaction in late 1979?