Treasury yields rose Monday as investors kicked off the second quarter and weighed the latest U.S. inflation data.
The 10-year Treasury note was trading 13 basis points higher around 4.325%, while the yield on the 2-year note was nearly 9 basis points higher at 4.709%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
TREASURYS
Yields rose after Federal Reserve Chair Jerome Powell said policymakers do not need to rush an interest rate cut, as economic growth remains strong and inflation is above target.
“That means we don’t need to be in a hurry to cut,” the central bank chief told public radio’s “Marketplace” program. “The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be.”
Markets are also reacting to the Bureau of Economic Analysis’ personal consumption expenditures reading for February, the Fed’s preferred inflation gauge, which released Friday. Excluding food and energy, the PCE rose 2.8% on a 12-month basis and was 0.3% higher from a month earlier, meeting expectations.
Steven Blitz, chief U.S. economist at TS Lombard, told CNBC’s “Squawk Box Europe” on Thursday that the likelihood of one or no Fed interest rate cuts this year was looking “pretty good.” Blitz said markets would continue to march higher, however, even if the Fed decides not to impose any interest rate cuts this year.
However, Canaccord Genuity’s Tony Dwyer said he thinks a deteriorating jobs market and easing inflation will ultimately push the Fed to act.
“I’m not saying that they have to go back to zero, but they have to be more aggressive,” the firm’s chief market strategist told CNBC’s “Fast Money” on Thursday. “One of the most aggressive topics that I talk to clients about is how bad the incoming data is.”
https://www.cnbc.com/2024/04/01/us-treasury-yields-search-for-direction-after-the-long-weekend.html