Wednesday, December 07, 2022

US Treasury bond yields rise after Fed decision, Powell’s speech

US Treasury bond yields rise after Fed decision, Powell's speech

Pour Herbert Lasho

nuevaNew YorkNovember 2 – Treasury bond yields rose in afternoon trading on Wednesday after Federal Reserve Chairman Jerome Powell warned of a premature easing of monetary policy.

* The Fed raised interest rates by three-quarters of a percent in its fight against the worst rise in inflation in 40 years, but indicated that future borrowing cost hikes would come in small phases, adding to the “cumulative tightening of monetary policy.” To give importance to.

* Following the decision, Powell said the Fed has a long way to go before it can even consider stopping rate hikes.

* Yields on 10-year Treasury bonds rose 4 basis points to trade at 4.09%, while yields on two-year paper, which are generally in step with interest rate expectations, rose 6.6 basis points to 4.603% Gone.

* “The tone of the Fed chairman’s comments was quite aggressive, meaning the Fed still has a long way to go to fight inflation, and interest rate levels will be higher than expected,” said Jack McIntyre, Portfolio Manager Brandywine Global, in an email.

* The spread between 2-year and 10-year bonds, considered a bearish harbinger when negative, rose to -53.70 basis points, in a sign the market is expecting an economic slowdown. Then it was trading at -49.50 basis points.

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